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Apple granted iPhone network license for China Mobile, world's largest carrier

post #1 of 112
Thread Starter 
The long wait for Apple to reach a deal with China Mobile, a carrier with more than 700 million subscribers, may finally be near an end, as the company has received the required license for its iPhone lineup from government regulators.

China Mobile


China's Telecom Equipment Certification Center was updated on Wednesday to reveal that Apple had been granted a "network access license" for an iPhone that would run on China Mobile's network, according to The Wall Street Journal. The devices would be compatible with China Mobile's 3G and 4G LTE networks.

Also given approval were iPhones compatible with carriers China Unicom and China Telecom, both of which are set to receive the iPhone 5s and iPhone 5c when they go on sale worldwide next Friday, Sept. 20.

China Mobile subscribers will have to wait a little longer, however. According to KGI analyst Ming-Chi Kuo, the iPhone will launch on its network before the end of the year, allowing China Mobile more time to finish rolling out its TD-LTE high-speed network.

After they were announced on Friday, the iPhone 5s and iPhone 5c were both revealed to support China Mobile's TD-LTE bands, suggesting that the carrier already has an unannounced partnership with Apple. The TD-LTE standard is a somewhat rare flavor of 4G used by China Mobile.

With more than 740 million subscribers and 138 million smartphone users, China Mobile is the largest wireless provider in the world. Rumors of an imminent deal between Apple and the carrier have remained for years, but to date the iPhone is still not officially available on China Mobile.

But Apple did announce a deal has been struck with NTT DoCoMo this week, the largest carrier in Japan with about 61 million subscribers. Both the iPhone 5s and iPhone 5c will launch on that carrier next Friday.

The addition of NTT DoCoMo and anticipated launch of iPhones on China Mobile is predicted by analyst Chris Withmore of Deutsche Bank to drive an additional 35 million handset sales in calendar 2014. In his eyes, that could incrementally boost the company's 2014 earnings per share by around $5.
post #2 of 112
Finally. Huge news.

Yet, AAPL getting punished now, down $19 pre-market. Clearly, the market is reacting negatively to the surpringly conservative 5C pricing. It's a huge opportunity lost.
Edited by anantksundaram - 9/11/13 at 5:17am
post #3 of 112
I guess Apple is waiting until launch date to officially announce the partnership.

Good news either way.
post #4 of 112

Good timing potentially four months after the new models are released and mostly outside the affordability of the Chinese consumer.  No wonder the stock is continuing to get hammered.

post #5 of 112
Indeed! And they've just released the perfect (i.e. easily up-scaled mass production) iPhone for the China and Japan markets. Expect stock prices to soar.
post #6 of 112
Apple gets iPhone on world's largest carrier. Quick, sell your stock? 6% down over 2 days when it opens.
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post #7 of 112
Quote:
Originally Posted by anantksundaram View Post

Finally. Huge news.

Yet, AAPL getting punished now, down $19 pre-market. Clearly, the market is reacting negatively to the surpringly conservative 5C pricing. It's a huge opportunity lost.
Apple can't announce this partnership soon enough. Time will tell if the 5C pricing was a mistake. A lot of pundits thought the iPad mini would be cheaper too. Yet the product still sold very well.
post #8 of 112
Quote:
Originally Posted by tkell31 View Post
 

Good timing potentially four months after the new models are released and mostly outside the affordability of the Chinese consumer.  No wonder the stock is continuing to get hammered.

 

What could Apple possible do?  If they priced the 5C at $300-$400 they would see massive canibalization and margins will suffer.  Bottom line is Apple choose to stay at the top end of the phone market for now.  But the introduction of the 5C (plastic phone) will allow them to enter the true mid-level market when the right time comes.

 

Bottom line is Apple makes slow and deliberate moves.  Remember when all the ANALysist said last year that the iPadMini was way to expensive?  What would have happened if they priced the Mini at $199 like all the ANALysist said?

post #9 of 112
Quote:
Originally Posted by enzos View Post

Indeed! And they've just released the perfect (i.e. easily up-scaled mass production) iPhone for the China and Japan markets. Expect stock prices to soar.

Perfect?  Maybe 5% of the people on China Mobile will buy a phone in that price range. Of that 5% how many will pick an iPhone?  1 or 2 percent?

 

The reason the stock is tanking is the 5c isn't going to gain Apple any substantial penetration increase (ie revenue increase) and with nothing else announced no reason to expect the EPS to increase.

 

The reality is EPS could be $30 this time next year.  That's a big number, but not big enough to sustain the sock price.  Next quarter should look good with both phones being available everywhere for part of September, and then there is the holiday quarter, but hard to see either beating the numbers year over year.

post #10 of 112
Regarding the 5c pricing...Apple is doing the right thing here. Whether you like it or not. Apple is setting the bar not following others to the bottom. It makes no sense for them to gain unprofitable marketshare by offering a low price to satisfy investors.
post #11 of 112
Quote:
Originally Posted by sog35 View Post


Bottom line is Apple makes slow and deliberate moves. 

That's just not been true since 2001. The most remarkable thing about Apple has been its willingness to kill off the old to replace with the new, as long as the customer and the cash flow stayed with the company (recall what they did with the Nano?). The current conservatism is what many people are reacting negatively to.

Listening to Walter Isaacson this morning on CNBC came as a sad revelation, since I found myself agreeing with him (I am sure they'll upload the clip in the next hour or so).
post #12 of 112
Quote:
Originally Posted by anantksundaram View Post

That's just not been true since 2001. The most remarkable thing about Apple has been its willingness to kill off the old to replace with the new, as long as the customer and the cash flow stayed with the company (recall what they did with the Nano?). The current conservatism is what many people are reacting negatively to.

Listening to Waltre Isaacson this morning on CNBC came as a sad revelation, since I found myself agreeing with him (I am sure they'll upload the clip in the next hour or so).

What did Walter say?
post #13 of 112
Quote:
Originally Posted by anantksundaram View Post

Finally. Huge news.

Yet, AAPL getting punished now, down $19 pre-market. Clearly, the market is reacting negatively to the surpringly conservative 5C pricing. It's a huge opportunity lost.

 

Personally, I'm rather proud of how they "unapologetically" refused to sell a cheaper iPhone.

 

IMO, by judging Apple with the optics of the stock market, we risk losing sight of what this company is about. I appreciate, respect that some here have much invested. But going against the grain is Apple's trademark, lest we forget. 

post #14 of 112
Does anyone know when reviews will start coming out? I assume tech journalists have review units they're using right now?
post #15 of 112
Quote:
Originally Posted by TechProd1gy View Post

Regarding the 5c pricing...Apple is doing the right thing here. Whether you like it or not. Apple is setting the bar not following others to the bottom. It makes no sense for them to gain unprofitable marketshare by offering a low price to satisfy investors.

 

It's not about right or wrong. It's a choice. And they chose, as they often, to go a different path. Good on Cook.

post #16 of 112
Quote:
Originally Posted by Rogifan View Post

Does anyone know when reviews will start coming out? I assume tech journalists have review units they're using right now?

 

Some brief, initial hands-on reviews are already out. But, frankly, what are you expecting? The answer to the key question is out there - Touch ID is nearly instantaneous.

post #17 of 112
Quote:
Originally Posted by Rogifan View Post

Does anyone know when reviews will start coming out? I assume tech journalists have review units they're using right now?
http://arstechnica.com/apple/2013/09/a-tale-of-two-iphones-hands-on-with-the-iphone-5s-and-iphone-5c/
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post #18 of 112
I've seen all those. I'm talking about full on reviews. Obviously there is an embargo until a certain date. I'm wondering when that is.
post #19 of 112
Quote:
Originally Posted by tkell31 View Post
 

Perfect?  Maybe 5% of the people on China Mobile will buy a phone in that price range. Of that 5% how many will pick an iPhone?  1 or 2 percent?

 

The reason the stock is tanking is the 5c isn't going to gain Apple any substantial penetration increase (ie revenue increase) and with nothing else announced no reason to expect the EPS to increase.

 

The reality is EPS could be $30 this time next year.  That's a big number, but not big enough to sustain the sock price.  Next quarter should look good with both phones being available everywhere for part of September, and then there is the holiday quarter, but hard to see either beating the numbers year over year.

 

You analysis makes ZERO sense.  Why would earnings drop 25%.  Its not like Apple had a 'mid range' phone before.  The only way I could see earnings dropping that much is if they did release a cheap phone for $300.  They would sell more phones but their margins would be cut in half.  By pricing the 5C near the high end they will maintain or even increase margins. 

 

And tell me what other phone has Apple ecosystem, build quality, customer service, and prestige that is priced at $550?  There is none.  Why should Apple sell a phone for $300 that gives so much value.

post #20 of 112
Quote:
Originally Posted by StruckPaper View Post

Personally, I'm rather proud of how they "unapologetically" refused to sell a cheaper iPhone.

IMO, by judging Apple with the optics of the stock market, we risk losing sight of what this company is about. I appreciate, respect that some here have much invested. But going against the grain is Apple's trademark, lest we forget. 
Someone on the Verge forums made an intersting observation: that the 5C might be a transitional product and next year it becomes the low end and the 5S doesn't go plastic. Of course the question then might be why didn't Apple get rid of the 4S and replace it with the 5C and keep the 5 as the mid-range. I think we know why, but my guess is that's what Wall Street wanted. Until of course Apple reported quarterly results and margins and profits were down.
post #21 of 112
Quote:
Originally Posted by sog35 View Post
 .  But the introduction of the 5C (plastic phone) will allow them to enter the true mid-level market when the right time comes.

 

 

At $550, its not "true mid-level", its still high end prices...

 

I dont mind Apple selling this 5C at $550 with the ip5 specs, BUT then they should also do a $400 phone with the 4s specs. Its not just emerging markets, its all markets that will get hurt.

post #22 of 112

They finally got the contract to be on the network, but too bad they forgot to bring the "inexpensive" phone they need to succeed in that market. 

post #23 of 112
Here's another intersting observation from the Verge forums: http://www.theverge.com/2013/9/11/4718150/between-the-lines-what-apple-told-us-today
post #24 of 112
Quote:
Originally Posted by Rogifan View Post


Apple can't announce this partnership soon enough. Time will tell if the 5C pricing was a mistake. A lot of pundits thought the iPad mini would be cheaper too. Yet the product still sold very well.

 

The iPad mini was arguably a better product than the original overall though.  It is a similar situation in that the mini had "last years" internals, which is probably in part what prompted Apple to think that they might get away with doing that again, but I would argue that the mini sold because it's a better form factor than the original in so many ways.  The iPhone 5c has … colours.

 

I think it will increase sales for a variety of reasons and the fact that they are even on China mobile will as well.  Next year they will be up on stage telling us what a success it all was, but in fact it will be a moderate success.  A moderate success that disguises the fantastic success they could have had with a truly affordable off contract iPhone.  The addition of huge numbers of China mobile subscribers and the general rise in popularity and market share will cover up the fact that it could have been so much better.  

post #25 of 112

So the consensus by the critics posting here is that Apple should go cheap, join the race to the bottom just so they can make a claim in the numbers game? So you have fallen for the "market share means everything" FUD? The Fandroids taunting has finally gotten to you? Na na-na, na-na na, Android rules the world because it's on more crappy phones! Apple is doomed!

 

The idea of quality, design, function, and just plain good taste is anathema to this crowd. You want the 5c to be the cheapest piece of crap so it can be free on contract. You all should just switch platforms and be done with it. Your mentality is much more suited to that tasteless, fragmented excuse for a platform.

post #26 of 112
Quote:
Originally Posted by Rogifan View Post


What did Walter say?

http://video.cnbc.com/gallery/?play=1&video=3000197443
post #27 of 112

All you complainers really are like spoiled kids at Christmas.

 

You dream up what you want almost immediately after LAST Christmas is over, and start yapping about it, believing that if you yap loud enough and long enough that you'll get it.

 

You look through all the gifts under the tree for yours. You heft them, shake them, compare their sizes to what you remember seeing on the store shelves. Some even try to open a corner of the wrapping.

 

And then, OH THE DISAPPOINTMENT! It wasn't what you wanted. Wrong color, not the more expensive one, CLOTHES (yuk!).

 

It doesn't faze you at all that your parents have your best interests at heart. While they may want to please you, if what you're asking for is junk in their minds or they can't afford it, they're going to at least get you what they think is worthwhile or what you actually need.

 

So Apple's done it yet again: they came up with some more great new products.

 

Careful now! If you reject your presents, then they may just go to others who DO appreciate them!

Daniel Swanson

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post #28 of 112
Quote:
Originally Posted by StruckPaper View Post


Personally, I'm rather proud of how they "unapologetically" refused to sell a cheaper iPhone.

IMO, by judging Apple with the optics of the stock market, we risk losing sight of what this company is about. I appreciate, respect that some here have much invested. But going against the grain is Apple's trademark, lest we forget. 

First, 'less expensive' does not equal 'cheap.'

Second, I truly wish Apple would 'go against the grain' some more, and break a few molds. What we're seeing out of this team -- so far -- is conservatism.
post #29 of 112

Isn't it likely that China Mobile will sell the 5C at a substantially lower price with a subscription, and the reason it took so long to sign a deal was that Apple wanted to sell the 5C cheaper unlocked in China?

 

flyingviking

post #30 of 112
Hey Wall Street, there's your growth market!
post #31 of 112
For the ministry to test, there must have been a phone. I also thought that the application is submitted thru the carrier.
post #32 of 112
Quote:
Originally Posted by flyingviking View Post
 

Isn't it likely that China Mobile will sell the 5C at a substantially lower price with a subscription, and the reason it took so long to sign a deal was that Apple wanted to sell the 5C cheaper unlocked in China?

 

flyingviking

 

I agree with this.  The 5C will give the price flexability it needs in emerging markets such as China and India.  I can see the 5C getting big discount prices after the initial 2013 release in China/India but not in the subsidized markets.  The lower manufacturing costs gives Apple the ability to preserve 5S sales in subsidized markets by keeping the 5C prices relatively high.  But discounting 5C prices in emerging markets that don't offer subsidies.  This would have been impossible with a 'cheaper' metal phone.

post #33 of 112
Quote:
Originally Posted by herbapou View Post

At $550, its not "true mid-level", its still high end prices...

I dont mind Apple selling this 5C at $550 with the ip5 specs, BUT then they should also do a $400 phone with the 4s specs. Its not just emerging markets, its all markets that will get hurt.

Isn't the 4S $450 now?
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post #34 of 112
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Originally Posted by Rogifan View Post

I've seen all those. I'm talking about full on reviews. Obviously there is an embargo until a certain date. I'm wondering when that is.

It doesn't look to be "embargoed" at all if Ars has one for review and openly publishes what it sees. Here's another hands-on review, meaning they also have one to evaluate and there was (almost certainly) no restriction on commenting about it now.
http://www.techradar.com/us/reviews/phones/mobile-phones/iphone-5s-1179315/review

Perhaps you're waiting on an Anandtech type highly-detailed review? Those take a while to do properly.
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post #35 of 112
Quote:
Originally Posted by herbapou View Post

At $550, its not "true mid-level", its still high end prices...

I dont mind Apple selling this 5C at $550 with the ip5 specs, BUT then they should also do a $400 phone with the 4s specs. Its not just emerging markets, its all markets that will get hurt.

It follows the pattern Apple has had for years - Good, better, best. They simply used the 5C instead of the 5 for 'better'.

Apple is not going to sell a cheap phone. Get over it.
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post #36 of 112

If they did release a very inexpensive phone and increased sales worldwide, while lowering their margins, then the WS gurus would cream them next year for y/y losses if the assumption is a cheaper phone would lead to massive sales.  Either way, they lose. Cheap price, lower margins massive sales this year.  Higher price, lower sales, but with the option of lowering the 5c next year so y/y looks great.   

post #37 of 112
Quote:
Originally Posted by jragosta View Post


It follows the pattern Apple has had for years - Good, better, best. They simply used the 5C instead of the 5 for 'better'.

Apple is not going to sell a cheap phone. Get over it.

 

 

Being completly out of the stock helps getting over it indeed. They can go and paint themselves into a niche market  all they want.

post #38 of 112
Quote:
Originally Posted by sog35 View Post

You analysis makes ZERO sense.  Why would earnings drop 25%.  Its not like Apple had a 'mid range' phone before.  The only way I could see earnings dropping that much is if they did release a cheap phone for $300.  They would sell more phones but their margins would be cut in half.  By pricing the 5C near the high end they will maintain or even increase margins. 

And tell me what other phone has Apple ecosystem, build quality, customer service, and prestige that is priced at $550?  There is none.  Why should Apple sell a phone for $300 that gives so much value.

To garner market share. Apple has been downgraded by 3 banks today despite the china mobile deal. The stock market wants apple to surrender margin for share, it is a platform war after all. Android is fast becoming the developer first option here in Europe. America may be an iOS bubble. The world isn't. And why wouldn't apple compete?
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post #39 of 112

I guess the message to take out of this is there is only so much money you can squeeze out of the smartphone market and Apple is topped out.  If they cant come up with a profitable lower end phone that wont cannibalize high end sales then this pricing makes sense, but it sends a clear message Apple stock only has one way to go, down.

 

Under Cook's tenure the only thing they've done is make a small iPad.  Is Apple ever going to release a new product under Cook?  Apple is floundering (once again, in comparison to the last 6 years) and unless they can make money off the operating system it's hard to see the trend reversing itself.

post #40 of 112

Just because the iPhone has a chip that supports China Mobile's network, doesn't mean China Mobile will sell or support it. 

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