Analyst: No Apple-China Mobile Deal Is No Big Deal
A prominent analyst recently told Apple (NASDAQ:AAPL) investors not to worry about the current lack of a distribution deal between Apple and China Mobile (NYSE:CHL). According to Barron’s, Barclays analyst Ben Reitzes characterized the buildup to the long-rumored deal as “overhyped.” The analyst reiterated an “Overweight” rating on Apple stock and a $585 price target.
The Wall Street Journal had previously cited sources that reported China Mobile would announce a distribution deal with Apple when it unveiled its new 4G services at a global partner conference in Guangzhou on December 18. However, the carrier failed to announce a distribution deal.
Reitzes noted that his own supply chain checks had not revealed an increase in iPhone manufacturing that would be expected to accompany a distribution deal with China Mobile. “We believe this news is likely why our analysis of builds has pointed to a lack of iPhone upside for weeks with solid 5S indications — coupled with very weak trends in the 5C,” wrote Reitzes in a note obtained by Barron’s. “When a deal is eventually announced with CM, we expect a steady take rate given network limitations.”