China Mobile: 1Million New iPhone Users Last Month

Source: China Mobile

China Mobile’s (NYSE:CHL) recently revealed mobile subscriber numbers showed that the telecom giant is already reaping the benefits of its partnership with Apple (NASDAQ:AAPL). China Mobile CEO Li Yue told The Wall Street Journal that the carrier added approximately 1 million new iPhone users during the month of February. According to China Mobile’s website, the world’s largest carrier has more than 775 million total subscribers on its network.

“We added 1.34 million new 4G users in February and most of them are iPhone users,” China Mobile Chairman Xi Gouhua told The Wall Street Journal. “We are happy with the progress as we are still building our 4G network and the coverage is only available in some major cities.”

Although Apple officially launched the iPhone on China Mobile’s network on January 17, many analysts estimate that there were millions of unlocked iPhones already being used on the carrier’s 2G and 2.5G networks. China Mobile’s expanding 4G TD-LTE network and the official availability of the iPhone 5C and the iPhone 5S likely helped to boost the carrier’s iPhone user numbers.

China Mobile’s positive iPhone subscription news followed the disappointing news that the carrier sustained its first yearly earnings drop in more than 10 years. However, many analysts anticipated that China Mobile would take an initial hit in earnings after signing its distribution deal with Apple due to subsidies related to the newly available iPhones. China Mobile also incurred significant expenses last year related to the ongoing establishment of its 4G network. It is widely expected that the completion of China Mobile’s 4G mobile networks will boost sales of Apple’s iPhone even further.

Despite China Mobile’s recent earnings decline, both companies are expected to derive long-term benefits from their partnership. Market research firm IDC said that Apple’s partnership with China Mobile will allow the iPhone maker to double the market share it held in China last year. Similarly, Piper Jaffray analyst Gene Munster predicted that Apple’s China Mobile deal could add as many as 17 million units to its total iPhone sales in 2014, according to Barron’s.

Apple’s iPhone sales in China may also see a boost from the recent release of an 8GB-capacity iPhone 5C. Apple introduced the 8GB iPhone 5C in Australia, China, France, Germany, and the U.K. on March 18. The 8GB iPhone 5C allows Apple to lower the entry-level costs for price-conscious consumers that want a cheaper iPhone with 4G network capability. Although the entry-level iPhone 4S is still cheaper than the 8GB iPhone 5C, the iPhone 4S is not compatible with 4G networks.

More From Wall St. Cheat Sheet:

Follow Nathanael on Twitter @ArnoldEtan_WSCS