If Morgan Stanley’s assessments are to be believed, Apple would soon tie up with Chinese carriers China Mobile and China Telecom over the next one year, and this move will increase Apple sales in China to almost 40 million in 2013.
The new partnerships will make iPhone available on all three carriers in China, and further reach out to the majority of “high end Chinese subscribers”, about 120 million of them who are subscribed to China Mobile, the largest carrier in the country. Currently, it is only available on China Unicom, and has reached out to only about 10% of the 150 million potential subscribers. After China Mobile and China Unicom, the last 10% subscribers are on China Telecom, which is third largest in the country.
Analyst Katy Huberty’s base case reveals that sales could go up by 26 million with the partnership with China Mobile and China Telecom, while her bull case in fact says it could go up to 40 million units with a $10 per share increase in earnings.
The iPhone sixth generation to be launched in the third quarter of 2012 is likely to be release by China Mobile in late 2012, or early 2013, and would be compatible with the carrier’s new 4G TD-LTE network, if true to speculation the device is built with quad-mode baseband chip from Qualcomm. If Apple is able to reach out to another 20% of the China Mobile subscribers as was with China Telecom, then according to Huberty the sales could rise to 24 million units on China Mobile alone. And with 3G smartphones becoming increasingly popular in China, the number could well go up to 36 million units in 2013.
Investment bank Morgan Stanley’s analysis also suggests that the iPhone might be available on China Telecom before China Mobile, with Apple CEO Tim Cook’s comments, recent checks and approvals pointing to the same. The company would be able to add about two to four million additional sales of iPhone units with China Telecom in 2012 itself.
The iPhone’s potential throughout the world is extensive, since only 30% of global carriers currently support the iPhone as compared to RIM’s Blackberry supported by 79% of them. In China, Apple has surpassed Nokia to become the top smartphone brand in China, with staggering sales of the iPhone 4S in the country.
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