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China Telecom expected to sell 3-5 million iPhones, Mountain Lion to reinforce iPhone "halo"

post #1 of 6
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Apple's newest partner in China is expected to sell 3-5 million iPhones this year, boosting Apple's momentum during the summer while the release of OS X Mountain Lion will reinforce the iPhone's halo effect over Mac sales, writes analyst Ben Reitzes of Barclays Capital.

In a note obtained by AppleInsider Reitzes wrote that China Telecom's announced deal to carry the iPhone 4S alongside China Unicom, starting March 9, will help "support iPhone momentum, especially over the summer quarters of the year."

The note highlighted that China "represents one of the largest growth opportunities for Apple right now and that the country could even be bigger than the US within a few short years." China already accounts for 12 percent of Apple's revenue, $12.5 billion in fiscal 2011.

Citing colleague Anand Ramachandran, who covers China Telecom, Reitzes wrote, "we believe that Apple could sell at least 3 million iPhones through China Telecom for the remainder of CY12 (with a best case scenario of nearly 5 million)."

Mountain Lion increases iPhone halo, thwarts Ultrabook threat

The next release of OS X, this summer's Mountain Lion, "brings even more new features to Macintosh computers that are inspired by the iPad and iPhone," Reitzes wrote, noting "we see this similarity as a good thing, serving to reinforce the 'halo effect' on Macs from the rest of Apple's success."




The note said the update also seems "perfectly suited for a new line of MacBook Airs that we expect to drive a new product cycle for Macs" in the second half of 2012.

"We believe that Apple intends to thwart any potential threat from Ultrabooks with this product line," the note stated, "and we expect more aggressive pricing and industry leading designs."


[ View article on AppleInsider ]
post #2 of 6
These analysts are so creative...

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post #3 of 6
Only 3-5 million in the calendar year? That seems low even on the high value. Does China Mobile have 1% of their 650 million subscribers using unofficial iPhones that can only function on '2G' data?

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post #4 of 6
Quote:
Originally Posted by SolipsismX View Post

Only 3-5 million in the calendar year? That seems low even on the high value. Does China Mobile have 1% of their 650 million subscribers using unofficial iPhones that can only function on '2G' data?

I would agree, but the addressable market for smart phones on China Mobile is likely in the range of 30-50MM subscribers. If Apple hits 10% of that market you get the numbers the analysts foist. 15-20% seems much more likely, but if it is focused on Shanghai and Beijing then it might make sense.
post #5 of 6
I was wondering how they managed to pick the estimated sales numbers before the iPhone 4S is even offered for sale. I wondered what they were basing those estimates on. I'll wait to see what Apple's estimates are.
post #6 of 6
Quote:
Originally Posted by SolipsismX View Post

Only 3-5 million in the calendar year? That seems low even on the high value. Does China Mobile have 1% of their 650 million subscribers using unofficial iPhones that can only function on '2G' data?

Remember that the article is about China Telecom which is the 3rd biggest carrier with only something 117 million customers, the vast majority of which are feature phone prepaid users. I forget the stats mentioned in previous articles but only something like 15 million customers are smartphone users. So to reach that high end mark of 5 million they'd have to either convert 33% of China Telecom's smartphone base over to iPhone or create a lot of new smartphone users. I'm sure a combination of both is possible and that the 5 million mark is reachable. However, given currently available data it doesn't seems like the 3-5 million is unreasonably low. I'll be happy for the analysts to be very wrong as usual though.
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