Analysts Weigh In On China Mobile’s iPhone Numbers

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China Mobile (NYSE:CHL) chief executive Li Yue told The Wall Street Journal on Thursday that the carrier had added approximately 1 million new iPhone users during the month of February. Soon after China Mobile made the announcement, several analysts offered their opinions on what those sales numbers meant for Apple (NASDAQ:AAPL).

Piper Jaffray analyst Gene Munster, who maintains an “Overweight” rating and a $640 price target on Apple shares, had mixed feelings about China Mobile’s February iPhone sales numbers. In an interview on CNBC, the Piper Jaffray analyst noted that the 1 million units figure was “spot on” with his estimate of 3 million units in the March quarter, and he observed that “investors need to be patient about China Mobile.” On the other hand, Munster also called China Mobile’s February sales numbers “a disappointment” and told CNBC that “it would be nice if there was more traction.”

Cowen and Company analyst Timothy Arcuri was also cautiously optimistic. In a note to investors obtained by Barron’s, Arcuri confirmed that China Mobile’s February iPhone sales numbers were in line with his own expectations, but that it was also below consensus expectations. “[W]e think March quarter consensus is currently closer to 5MM,” wrote Arcuri.

However, Arcuri cited several factors behind China Mobile’s limited iPhone sales in February. “1) China Mobile’s 4G network is in the early stages of a phased roll-out and was available in only a select number of major cities at launch,” noted Arcuri. “2) iPhone’s ~75% implied market share of China Mobile’s February LTE connections is in line with, and in some cases, significantly higher than, other major operators with highly correlated iPhone sales and LTE connection growth {e.g. DoCoMo (NYSE:DCM), Telstra, AT&T (NYSE:T)}, 3) China Mobile management reiterated C14 guidance for ~100MM LTE device sales and an LTE installed base of ~50MM.”

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