Apple’s China Romance Can Get Much Sweeter
Tech companies are among those hit hard by the economic slowdown in China, but according to ISI Group analyst Brian Marshall, Apple (NASDAQ:AAPL) could escape a similar fate by tapping the world’s largest wireless provider by subscriber numbers, China Mobile (NYSE:CHL).
Marshall estimated that Apple would be able to double its iPhone sales in China if a deal were to be struck with the provider. Currently, the iPhone represents about 15 percent of the smartphone market in the country through partnerships with China Unicom (NYSE:CHU) and China Telecom (NYSE:CHA), but according to Marshall, Apple is only addressing about a third of the subscriber base there.
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China Mobile, which represents about two-thirds of Chinese wireless subscribers, has a network that is currently technically incompatible with the iPhone. However, several analysts have predicted that considering the carrier’s might, it’s only a matter of time before Apple releases a compatible model of the smartphone. China Mobile currently has 688 million subscribers, 69 million of which are on its 3G network. China Unicom has 226 million subscribers, while China Telecom is third with 147 million.
According to Marshall, Apple has “plenty of runway” for growth in the country and may be able to rise at a rate above the corporate average. “We believe Apple sales would be relatively immune to a China slowdown due to brand affinity, increasing distribution, minimal competition, and a large runway for greater penetration,” he said during a presentation at his company’s China Mini Seminar on Thursday in New York City, according to AppleInsider.
It was reported on Wednesday that Apple had received mandatory regulatory approval to officially launch the iPhone 5 in China, hinting that the device may be in consumer hands in the country before the end of the year.
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