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Imminent iPhone launch on China Mobile could add $10B per year in revenue for Apple

post #1 of 40
Thread Starter 
With evidence growing that the iPhone could launch on the world's largest carrier, China Mobile, on Dec. 18, analysts expect big things for Apple's financial bottom line in the coming 2014 calendar year.

iPhone 5s


Amit Daryanani of RBC Capital Markets said in a note to investors on Tuesday that he projects Apple will see an additional $9 billion to $10 billion in annual revenue added from a deal with China Mobile. He sees that adding about $3.00 in earnings per share to the company's stock.

Those estimates are based on a forecast of 17 million iPhone sales, with a conservative average selling price of $560 per unit and 30 percent operating margins.

A deal with China Mobile is hotly anticipated by investors because the carrier has 755 million subscribers, making it by far the largest wireless provider in the world. Of those, 170 million are high-speed data customers.

If Apple were to sell 17 million iPhones through China Mobile over the next year, it would represent a 10 percent penetration rate of the carrier's current 3G subscriber base.

To put China Mobile's reach in perspective, its competitors China Unicom and China Telecom combine for just 454 million subscribers. However, both of those providers have a higher penetration rate of 3G customers, with a combined 208 million high-speed subscribers in China.

iPhone 5c


Daryanani believes the addition of China Mobile could increase Apple's market in China by 1.8 times. He noted that total number of 3G subscribers in China continues to grow, with a sequential increase of 16 percent in the September quarter.

A potential deal with China Mobile has been rumored for years, but the appearance of a reservation system in Southern China has whipped up speculation once again that an iPhone launch is forthcoming. Another report from state-run media last month claimed that the iPhone 5s and iPhone 5c are set to launch on China Mobile Dec. 18, the same day the carrier is slated to activate its high-speed 4G LTE network.

Apple's latest iPhones are already offered in variants compatible with China Mobile's unique TD-LTE and TD-SCDMA networks.
post #2 of 40
Amit Daryanani has absolutely no way of qualifying those numbers.

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post #3 of 40
Quote:
Originally Posted by SpamSandwich View Post

Amit Daryanani has absolutely no way of qualifying those numbers.

 

Probably not, but Apple selling on China Mobile is certainly going to bring in millions of customers which will translate into billions of $$$.

 

If it launches on Dec 18th, and if Apple has enough stock to meet demand, I can see the China Mobile launch adding a few million more iPhone sales in the first week alone.

 

Apple's going to have a killer holiday quarter.

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post #4 of 40
Quote:
Originally Posted by SpamSandwich View Post

Amit Daryanani has absolutely no way of qualifying those numbers.

Quote:
Originally Posted by EricTheHalfBee View Post

Probably not, but Apple selling on China Mobile is certainly going to bring in millions of customers which will translate into billions of $$$.

If it launches on Dec 18th, and if Apple has enough stock to meet demand, I can see the China Mobile launch adding a few million more iPhone sales in the first week alone.

Apple's going to have a killer holiday quarter.

... and how do you qualify your "millions of customers which will translate into billions of $$$" statement? a guess?
post #5 of 40
Originally Posted by Pooch View Post
... and how do you qualify your "millions of customers which will translate into billions of $$$" statement? a guess?

 

Billions of millions of trillions of guesses.

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post #6 of 40
Quote:
Originally Posted by Pooch View Post


... and how do you qualify your "millions of customers which will translate into billions of $$$" statement? a guess?

China Mobile has approximately 600 million users / customers.  Even if Apple captures say 5% of that, that's 30 million customers. Let's say for argument sake, the average selling price of an iPhone in china is $600;

 

30 million x $600 equals $18 billion.  That's just based on my numbers (which are assumptions of course).

post #7 of 40
Quote:
Originally Posted by SpamSandwich View Post

Amit Daryanani has absolutely no way of qualifying those numbers.

It is just a GUESSTIMATE.  Don't get all weird about it.  He used an estimate of 17 Million iPhones sold to the China Mobile customer base in 2014.  Personally, I think that GUESSTIMATE, is low, but analysts would be better if they underestimated rather than over estimated.  It's kind of stacking the deck so they don't look foolish by overestimating.  That practice is used not only by Apple internally when making projections, but most people would suggest it's safer to use lower numbers than high numbers.  If Apple brings in more than these estimates, then Apple looks great, if Apple doesn't bring in that much, then Apple looks foolish.  It's the analyst game that's been played since the beginning of time.

 

I think guesstimating 17 Million iPhones with an average price of $560 per phone with 30 percent operating costs is a VERY SAFE number.  I personally think they are going to sell quite a bit more than 17 Million iPhones in the first year with China Mobile.

 

I know China Mobile has 740+ Million subscribers, but how many smartphones does China Mobile currently sell to their subscriber base that's either repeat customers or new customers?

 

There is no way of any analyst knowing how many Apple is going to sell through China Mobile than Apple, you or I, or anyone else for that matter.  Amit might have other sales numbers that he has gathered to arrive at that number.  Or, it's just a gut feeling, but it's a safe number to project.

post #8 of 40
Quote:
Originally Posted by Pooch View Post

... and how do you qualify your "millions of customers which will translate into billions of $$$" statement? a guess?

EricTheHalfBee's statement is considerably more general than Amit Daryanani's comments. Not only does Amit predict $9-10 billion, he specifics it's on 17 million iPhone at a $560 retail price with a 30% margin. For me, that's just way too specific to say I agree with that statement. It's not unreasonable that it couldn't happen, it's too very specific which leads to a much lower likelihood of being accurate. However, with EricTheHalfBee I could definitely say I agree what that it will be more than 1 million customers and over $1 billion in revenue in the first full year.

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post #9 of 40
Quote:
Originally Posted by Tallest Skil View Post
 

 

Billions of millions of trillions of guesses.

 

:lol:

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post #10 of 40
Quote:
Originally Posted by SolipsismX View Post


EricTheHalfBee's statement is considerably more general than Amit Daryanani's comments. Not only does Amit predict $9-10 billion, he specifics it's on 17 million iPhone at a $560 retail price with a 30% margin. For me, that's just way too specific to say I agree with that statement. It's not unreasonable that it couldn't happen, it's too very specific which leads to a much lower likelihood of being accurate. However, with EricTheHalfBee I could definitely say I agree what that it will be more than 1 million customers and over $1 billion in revenue in the first full year.

 

To quote Jim Dalrymple, "Yep".

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post #11 of 40

Here is what I find most interesting. Samsung has been selling their phones in every single country and on every single carrier on the planet for many years. Apple is just getting started and there are still many more countries they can continue to expand. It is hard to see how Samsung can grow much further than they already have. Meanwhile Apple has several billion potential new customers that will now start being able to buy an iPhone for the first time in the next few years as they continue to add more countries and carriers. Once Apple not only expands to more countries but also offers an iPhone with a larger display Samsung will no longer have any safe harbor. 

 

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post #12 of 40
A lot of variables come into play as well as Price point, Roll out of network (will it be all at once or certain cities and providence at a time.). And most importantly Asian acceptance of the models which are expected to b good but how good
post #13 of 40
Silly Apple, analysts have said there is no growth at the high-end. Give up. /s
post #14 of 40
Quote:
Originally Posted by SpamSandwich View Post

Amit Daryanani has absolutely no way of qualifying those numbers.


For sure; but it's good to see AAPL being seen as a good potential investment for a change ;-)

post #15 of 40

Apple will eventually go in the direction of a single universal component to reduce the number of SKU's they need to produce, and with Apple's scale the cost differential issue will be resolved. I thought that was going to happen this year with the new universal Qualcomm RF360 but for some reason they used the older Qualcomm LTE they used in the iPhone 5. I wonder what caused the delay? I suspect it just could not have been produced in a high enough volume so Apple didn't want to risk a possible shortage.

 

If it is ready for the iPhone 6 this will reduce the number of SKUs down to ones just based on the color and storage size which I imagine would provide a very nice cost savings not to mention a battery boost. The RF360 allows for 40 LTE bands as well as all GSM and CDMA . No more Verizon, China Mobile, or Vodafone versions of an iPhone, just one sku that can be sold in any and every country. All the pieces are falling into place for much higher sales for Apple. 

 

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post #16 of 40

This guy's estimating that only ~2.3% of CM's customers will buy iPhones. That is plainly silly.

 

At a (very reasonable) P/E ratio of, say, 14x, his EPS increase estimate o f $3 per share translates to a $42 per share price increase. That increase has already likely happened over the past couple of weeks (more than a third of it today), without even a formal announcement. 

 

When the announcement is made, I could see a further jump in AAPL.

 

If Apple were to get even 5% of CM (which I think is quite likely, since it is already estimated to have a 6% share in China even without CM's customers), and taking all of his other assumptions -- which also appear to be conservative, since they do not seem to take into account the HUGE economies of scale that it will achieve from selling tens of millions of extra iPhones -- as given, that will be (0.05)*(755M)*(560) = $21.14B in extra revenue, or $6.34 in additional EPS.

 

At a (very reasonable) P/E ratio of 14, that is a ~$89 increase in share price.

post #17 of 40
Quote:
Originally Posted by gwmac View Post

Apple will eventually go in the direction of a single universal component to reduce the number of SKU's they need to produce, and with Apple's scale the cost differential issue will be resolved. I thought that was going to happen this year with the new universal Qualcomm RF360 but for some reason they used the older Qualcomm LTE they used in the iPhone 5. I wonder what caused the delay? I suspect it just could not have been produced in a high enough volume so Apple didn't want to risk a possible shortage.

If it is ready for the iPhone 6 this will reduce the number of SKUs down to ones just based on the color and storage size which I imagine would provide a very nice cost savings not to mention a battery boost. The RF360 allows for 40 LTE bands as well as all GSM and CDMA . No more Verizon, China Mobile, or Vodafone versions of an iPhone, just one sku that can be sold in any and every country. All the pieces are falling into place for much higher sales for Apple. 

A couple thoughts. One, unified chips tend to be less power efficient that those designed for a specific task, not to mention there are cost and size considerations. Two, I would expect any country that still uses CDMA will have a different SKU for each CDMA MNOs due to the way the chipsets needs to be flashed to support a specific CDMA carrier.

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post #18 of 40
Quote:
Originally Posted by BUSHMAN4 View Post

And most importantly Asian acceptance of the models which are expected to b good but how good

Um... China = 'Asia'? :lol:

 

(For starters, look up what iPhone's share was in the past quarter in Japan -- and last I looked, Japan was in.... Asia).

post #19 of 40
Quote:
Originally Posted by CanukStorm View Post
 

China Mobile has approximately 600 million users / customers.  Even if Apple captures say 5% of that, that's 30 million customers. Let's say for argument sake, the average selling price of an iPhone in china is $600;

 

30 million x $600 equals $18 billion.  That's just based on my numbers (which are assumptions of course).

Currently, what's the average selling price for the iPhones that are selling into China (that's the number to use), then you calculate how many people buy Smartphones through China Mobile a year.  Not all of CM's subscribers buy Smartphones, many are still on feature phones due to lack of money.   Right now, it's just too early to predict, but I think the first couple of years will be great and then it will taper to some normal level.

 

I would say 20 to 30 Million phones is probably more realistic, but it could go higher, especially if Apple kicks out large screen iPhones in addition to the existing models, which is VERY likely. 

 

Obviously, $560 vs $600 isn't the much difference, but I think Amit was just using a number he already knows is the average selling price.

 

One thing to always remember, analysts will revise their estimates on a quarterly basis as they get additional information from Apple, or market observations.

 

I would wait for at least another 4 or 5 analysts make their predictions and then take an average.  Some analysts are consistently wrong, some are fairly accurate, whether or not you like the predictions.

 

Here's something to find out.  Out of the other China based carriers, what's Apple's market share?  20%, 30%?  Is it growing, staying stagnant or shrinking?  

 

Let's run a couple of what ifs.  Let's assume for a second that the other carriers have 20 and 30% of their subscribers are iPhone users, so it's possible that CM could see the same market share numbers within their own market over the course of 3 years.

 

740 Million subscribers total x .2 =  148 Million iPhone users

740 Million subscribers total x .3 =   220 Million iPhone users


Obviously, I don't know if they will get those numbers after the first year, but after the 3rd year, it's possible.

 

148/3 = 49 Million Users a year on average.

220/3 = 73 Million Users a year on average.

 

Do you like those numbers?  The caveat is that Apple has to be able to MEET those demands.

 

At their current rate of 500,000 iPhones a day in production, w/o any increase in production, they would hit 180MIllion units if they are operating 360 days a year.  Last year, they sold around 148 Million units for 12 months, so they have enough capacity (currently) to handle an increase of 32 Million units a year.  If they add more capacity, they could potentially ship even more.

 

I don't know the current landscape for the China market, but I think 17 Million units is low.  I think (providing they can meet demand and kick out a 5inch model early enough next year), they could easily see 50 Million units, not 17 Million, providing all goes as predicted and there aren't any strange occurrences unforeseen. 

 

Time will tell what the REAL numbers are.  But I think the number is going to be somewhere in between 20 and 50 Million units for just China Mobile in 2014, providing things progress how I think they will.

post #20 of 40
Quote:
Originally Posted by anantksundaram View Post
 

Um... China = 'Asia'? :lol:

 

(For starters, look up what iPhone's share was in the past quarter in Japan -- and last I looked, Japan was in.... Asia).

Japan is a small country compared to China.  Japan's population is around 127 Million people.  China has a population of 1.35 Billion.  China is 10x the size in terms of population.

post #21 of 40
Quote:
Originally Posted by drblank View Post

Japan is a small country compared to China.  Japan's population is around 127 Million people.  China has a population of 1.35 Billion.  China is 10x the size in terms of population.

Uh!? What does Japan's size have to do with whether it's in Asia?

Moreover, you know that Japan has 10x the income of China, right? Do you think that might have some implications for the number of iPhones sold there?
post #22 of 40
Quote:
Originally Posted by anantksundaram View Post


Uh!? What does Japan's size have to do with whether it's in Asia?

Moreover, you know that Japan has 10x the income of China, right? Do you think that might have some implications for the number of iPhones sold there?

 

Some people look at Asia as a whole market and some separate it out into different countries.  I would look at how Apple is doing by carrier in each country, and how well they are doing by country as a whole.


I don't even know why anyone would even bring up Japan when analyzing how much Apple is going to do with China Mobile, it has no relevance.

post #23 of 40
Quote:
Originally Posted by SolipsismX View Post


A couple thoughts. One, unified chips tend to be less power efficient that those designed for a specific task, not to mention there are cost and size considerations. Two, I would expect any country that still uses CDMA will have a different SKU for each CDMA MNOs due to the way the chipsets needs to be flashed to support a specific CDMA carrier.

Not this one. Check it out.

 

It is smaller and  more power efficient. CDMA phones have a database of ESIN. It is not a hardware limitation.  Verizon and sprint won't add the meid number to each other network so even if it could work they won't allow it. Prior to the iPhone 5s the Sprint and Verizon iPhone 5 which is a LTE/CDMA model were identical. Only the MEID database prevents them from working on the other network not anything to do with the iPhone hardware.

 

http://www.qualcomm.com/media/documents/qualcomm-rf360-front-end-solution-infographic

http://www.qualcomm.com/chipsets/gobi/rf-solutions/qualcomm-rf360-front-end

http://www.qualcomm.com/media/releases/2013/02/21/qualcomm-rf360-front-end-solution-enables-single-global-lte-design-next


Edited by gwmac - 12/3/13 at 4:25pm

 

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post #24 of 40
Quote:
Originally Posted by drblank View Post


Some people look at Asia as a whole market and some separate it out into different countries.  I would look at how Apple is doing by carrier in each country, and how well they are doing by country as a whole.


I don't even know why anyone would even bring up Japan when analyzing how much Apple is going to do with China Mobile, it has no relevance.

If anything has a lack of relevance, your post is Exhibit A.

It might help your comprehension if you actually read the thread, especially the part where BUSHMAN4 conflated China's acceptance of the iPhone with "Asia's" acceptance of the iPhone. I was explaining to him that there was this other "Asian" country (not exactly tiny either) where the iPhone has a massive share.

Could you seriously not figure that out!? (Unless, of course, you did not know that Japan was in Asia.)
post #25 of 40
Quote:
Originally Posted by anantksundaram View Post


If anything has a lack of relevance, your post is Exhibit A.

It might help your comprehension if you actually read the thread, especially the part where BUSHMAN4 conflated China's acceptance of the iPhone with "Asia's" acceptance of the iPhone. I was explaining to him that there was this other "Asian" country (not exactly tiny either) where the iPhone has a massive share.

Could you seriously not figure that out!? (Unless, of course, you did not know that Japan was in Asia.)

 

I was just explaining that Japan IS a part of Asia, but in order to figure out how many iPhones China Mobile is going to sell, I wouldn't look at the numbers from Asia, or Japan as any relevance to trying to figure out how many iPhones will be sold during the next 12 months through China Mobile.

 

China Mobile market share of iPhones is ZERO.  Apple only has two major carriers in China.  In China, because Apple doesn't have any sales through China Mobile, they have about 8%, so the smaller carriers are probably running somewhere between 20 and 30% is a GUESS, since no one has indicated how many iPhones are selling through just the two China based carriers that have been selling iPhones longer than a year.

 

My guess is that Apple should be able to garner about 20 to 30% through China Mobile alone during the next 3 years, that's about 150 to 220 Million users total for a 3 year time span.  I think that's doable.

 

Mentioning Japan and their market acceptance of iPhones has NOTHING to do with China.  Completely different market and to suggest that it's relevant is absurd.

 

Japan doesn't like Korea, which is partly why they don't like Samsung or other Korean mfg. and why Apple is doing well in Japan.

 

Japan is TINY compared to China.  1/10th the size of China.  Get out your map and look at the population of both countries.  You are acting like Japan's numbers are relevant.  They aren't.  

post #26 of 40
Quote:
Originally Posted by gwmac View Post

Not this one. Check it out.

It is smaller and  more power efficient. CDMA phones have a database of ESIN. It is not a hardware limitation.  Verizon and sprint won't add the meid number to each other network so even if it could work they won't allow it. Prior to the iPhone 5s the Sprint and Verizon iPhone 5 which is a LTE/CDMA model were identical. Only the MEID database prevents them from working on the other network not anything to do with the iPhone hardware.

http://www.qualcomm.com/media/documents/qualcomm-rf360-front-end-solution-infographic
http://www.qualcomm.com/chipsets/gobi/rf-solutions/qualcomm-rf360-front-end
http://www.qualcomm.com/media/releases/2013/02/21/qualcomm-rf360-front-end-solution-enables-single-global-lte-design-next

Could you explain why you think there will be one SKU for a given color and capacity iPhone in the US market with this chip when your comments clearly indicate you are aware of ESIN and the issues that have thus far prevented there from being a single SKU in the manner discussed when the HW is the same between two CDMA-based MNOs?
Edited by SolipsismX - 12/3/13 at 5:59pm

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post #27 of 40
Quote:
Originally Posted by drblank View Post

I think you get the IDIOT of the day award.  I was just explaining that Japan IS ......

Groan. Best not to sink to your level.

And, you've been reported.
post #28 of 40
Quote:
Originally Posted by anantksundaram View Post


Groan. Best not to sink to your level.

And, you've been reported.

For what?  Telling the truth?  What happens in the Japanese market has absolutely NOTHING to do with how much China Mobile is going to sell.

 

So why are you even bringing up Japan sales?  

post #29 of 40
Quote:
Originally Posted by Pooch View Post


... and how do you qualify your "millions of customers which will translate into billions of $$$" statement? a guess?

Anything that anyone says regarding future sales is a guess, some are more accurate in their guesses?  It wouldn't surprise me if they sold 5 Million units to CM customers, providing they had enough inventory.  Remember, Apple sold 9 Million units within the first 3 days after they announced the 5S and 5C.  China Mobile has a LOT of pent up demand.

post #30 of 40
Quote:
Originally Posted by anantksundaram View Post


Uh!? What does Japan's size have to do with whether it's in Asia?

Moreover, you know that Japan has 10x the income of China, right? Do you think that might have some implications for the number of iPhones sold there?

Here's another method of gauging how many rich people there are in a country.  Take a look at Rolls Royce Motorcars.  They have only three dealerships in the entire country of Japan.  In China, they are in the process or building more locations to have a total of 22 locations which should be completed fairly soon.  Meaning, there are a LOT of extremely rich people in China.  Yeah, there are a lot of poor people, but there are a LOT of people making more money than they used to.  The number of wealthy people in China making decent money is probably as many people in Japan.

 

How many Apple Store locations could China support vs Japan?  Probably about 9 to 10x, which is the about the population difference between the two countries.  China is getting a LOT more wealthier people in the larger cities as more and more products are made in China.  Yeah, the workers that assemble the products don't make much money, but their wages have increased over the last 5 years, but Apple wouldn't selling to assembly workers, they would be selling to people that are more upper management, business owners, etc., which is increasing pretty rapidly.

 

Just in terms of sales of Mercedes, they sold 56,000+ vehicles in the Sept quarter for China, in Japan, they only sold 14,500+ cars in the same time period.    BMW sales in China grew 20% and they sold 285,000 cars between Jan and Sept.

 

There was a report that mentioned that by the end of the decade China will surpass the US in terms of luxury car sales.

 

China has and is changing quite rapidly over the past decade and the current decade.

 

China will be the biggest market for premium brands of computers, cars, clothing, smartphones, etc.  That's why Apple is constantly building record sized stores in China.


Edited by drblank - 12/3/13 at 7:58pm
post #31 of 40
Quote:
 China Mobile market share of iPhones is ZERO.  Apple only has two major carriers in China.  In China, because Apple doesn't have any sales through China Mobile, they have about 8%, so the smaller carriers are probably running somewhere between 20 and 30% is a GUESS, since no one has indicated how many iPhones are selling through just the two China based carriers that have been selling iPhones longer than a year.

 

This is very interesting.  How is market share calculated?  Is it simply # number of iPhone sold in China vs poulation of mobile users?  This works for most countries but not China.  There are actually 42M iPhone users on China Mobile's network.  They just don't get 3G due to compatibility issues.  That is right, there are 42 MILLION people using 2G on their iPhone on China mobiles networks.  So China Mobile already has 5% of their users on iPhones.

 

A lot of these phones are purchased via the grey market (old models as well as the new ones).  People outside of Hong Kong and China probably doesn't know this.  But Hong Kong has one of the best prices for buying Apple products due to the Hong Kong currency has a fixed rate with the US and no tax.  With the rising China currency (RMB), there is a 15% difference in price.

 

So basically what people in Hong Kong do (and I mean the average Joe) is the order via the Apple Online store (limited to 2 per person when new model is release) and we just sell to local shops for like a $100+ USD profit (when new model is just released) and then goes down to $30-50 as more supply is available(plus we use credit card to get stuff like air miles).  And these local shops will find a way to ship them back to China for profit.  And it is a HUGE market, there are websites dedicated to the price fluctuations that have 50,000+ registered users.  I wouldn't be surprise if the Hong Kong stores (retail, online) sells more than 1 iPhone per capita each year.  Hong Kong has a population of about 7 million.  I am pretty sure the annual sales is at least 10M if not more.  If you think iPhone shortage is bad in the States, the Hong Kong online store usually lasts about 5 minutes for the first batch of iPhones.  And in store reservation?  People write automated programs (bots) to take all the slots right at 6AM when they go online.

 

I am not even that dedicated and I have resold 10+ iPhone 5s.  I know people in the 100+ range. 

post #32 of 40
Quote:
Originally Posted by vtwo View Post
 

 

This is very interesting.  How is market share calculated?  Is it simply # number of iPhone sold in China vs poulation of mobile users?  This works for most countries but not China.  There are actually 42M iPhone users on China Mobile's network.  They just don't get 3G due to compatibility issues.  That is right, there are 42 MILLION people using 2G on their iPhone on China mobiles networks.  

 

A lot of these phones are purchased via the grey market (old models as well as the new ones).  People outside of Hong Kong and China probably doesn't know this.  But Hong Kong has one of the best prices for buying Apple products due to the Hong Kong currency has a fixed rate with the US and no tax.  With the rising China currency (RMB), there is a 15% difference in price.

 

So basically what people in Hong Kong do (and I mean the average Joe) is the order via the Apple Online store (limited to 2 per person when new model is release) and we just sell to local shops for like a $100+ USD profit (when new model is just released) and then goes down to $30-50 as more supply is available(plus we use credit card to get stuff like air miles).  And these local shops will find a way to ship them back to China for profit.  And it is a HUGE market, there are websites dedicated to the price fluctuations that have 50,000+ registered users.  I wouldn't be surprise if the Hong Kong stores (retail, online) sells more than 1 iPhone per capita each year.  Hong Kong has a population of about 7 million.  I am pretty sure the annual sales is at least 10M if not more.

 

I am not even that dedicated and I have resold 10+ iPhone 5s.  I know people in the 100+ range. 

Well, the grey market will eventually shrink.  So you are one of those people that makes money by selling iPhones on the grey market in China?  And you are reporting ME?

 

So why did you even bother mentioning Japan?  Japan is a different market.

 

When I calculate the market share, it's what's being sold through various carriers, not the grey market, I don't think those numbers show up.  Apple will sell lots of phones directly through CM.  It's just a matter of how many.  I'm sure they might have special models made since CM's network is different.


I hope the grey market goes aways since it doesn't really help anyone.  It's sleazy.

post #33 of 40
Wow, you guys are all arguing over this way too much. If history tells us anything a lot of you will be very wrong and a few will be closer to the mark and in the end Apple will make a sh!t load of money. 1biggrin.gif

It seems only yesterday many folks were writing right here on AI that Japanese folks would never buy iPhones and Chinese people were all too poor ....
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Been using Apples since 1978 and Macs since 1984
Long on AAPL so biased. Strong advocate for separation of technology and politics on AI.
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Use duckduckgo.com with Safari, not Google Search
Been using Apples since 1978 and Macs since 1984
Long on AAPL so biased. Strong advocate for separation of technology and politics on AI.
Reply
post #34 of 40
How many AAPL can drop with no deal is done ? -70!?
post #35 of 40
Quote:
 
Quote:
Originally Posted by vtwo View Post
 

 

This is very interesting.  How is market share calculated?  Is it simply # number of iPhone sold in China vs poulation of mobile users?  This works for most countries but not China.  There are actually 42M iPhone users on China Mobile's network.  They just don't get 3G due to compatibility issues.  That is right, there are 42 MILLION people using 2G on their iPhone on China mobiles networks.  

 

A lot of these phones are purchased via the grey market (old models as well as the new ones).  People outside of Hong Kong and China probably doesn't know this.  But Hong Kong has one of the best prices for buying Apple products due to the Hong Kong currency has a fixed rate with the US and no tax.  With the rising China currency (RMB), there is a 15% difference in price.

 

So basically what people in Hong Kong do (and I mean the average Joe) is the order via the Apple Online store (limited to 2 per person when new model is release) and we just sell to local shops for like a $100+ USD profit (when new model is just released) and then goes down to $30-50 as more supply is available(plus we use credit card to get stuff like air miles).  And these local shops will find a way to ship them back to China for profit.  And it is a HUGE market, there are websites dedicated to the price fluctuations that have 50,000+ registered users.  I wouldn't be surprise if the Hong Kong stores (retail, online) sells more than 1 iPhone per capita each year.  Hong Kong has a population of about 7 million.  I am pretty sure the annual sales is at least 10M if not more.

 

I am not even that dedicated and I have resold 10+ iPhone 5s.  I know people in the 100+ range. 

Well, the grey market will eventually shrink.  So you are one of those people that makes money by selling iPhones on the grey market in China?  And you are reporting ME?

 

So why did you even bother mentioning Japan?  Japan is a different market.

 

When I calculate the market share, it's what's being sold through various carriers, not the grey market, I don't think those numbers show up.  Apple will sell lots of phones directly through CM.  It's just a matter of how many.  I'm sure they might have special models made since CM's network is different.


I hope the grey market goes aways since it doesn't really help anyone.  It's sleazy.

 

Lol, chill out.  I wasn't the guy who mentioned Japan.

 

I am just wondering about market share.  Where are you getting your number of 20-30% for the other Chinese carriers?  It is no where near that high.  Like I mentioned, people are mistaken if they think there is 0 iPhones on CM now.  Therefore, you cannot put China's market share numbers all into the other 2 carrriers. CM has 42 million iPhone (5% share on their networks now).

 

As for market share, I don't think analyst have numbers sold for all the brands from all the carriers/electronics shops.  I am pretty sure their numbers are from surveys of the general population.  That is why the numbers are sometimes different.  Most brands don't even reveal how many they sold each quarter (Samsung, etc) and Apple doesn't even have regional breakdown as far as I know.  So I actually think the grey market iPhones are accounted for in market share.

 

And please don't comment on the grey market if you don't know anything about it.  It is not like I am paying people to stand in to buy iPhones from other people who want them.  I order them online and re-sell to shops.  There is profit to be made because of the price difference between Hong Kong and China prices.  It is as sleazy as people in the US driving to states with lower taxes to buy things.  Or buying things from duty free shops at the airport.  Or people selling hot items on eBay.  

post #36 of 40
Quote:
Originally Posted by SolipsismX View Post


Could you explain why you think there will be one SKU for a given color and capacity iPhone in the US market with this chip when your comments clearly indicate you are aware of ESIN and the issues that have thus far prevented there from being a single SKU in the manner discussed when the HW is the same between two CDMA-based MNOs?

Sure, I will be happy to explain that once you admit you were wrong about a universal front end needing to be less power efficient. You also mentioned size considerations even though the RF360 is smaller. You also said the chipsets for CDMA need to be flashed to support a different CDMA carrier is also inaccurate since they use a MEID database and only allow ones in their database so no flashing required. Once you address your three errors lets address the possibility they they would indeed have separate SKU's. By the way you do realize that printing separate SKU's on a box would be a lot cheaper than actually producing dozens of more actual models. An iPhone with a RF360 would mean far fewer actual iPhone lines needed to be run at Foxcomm and other assembly lines resulting in cost savings for Apple. That is the true savings benefit. Who cares if they have the same number of Sku's printed on the boxes when they can essentially make one iPhone that can be used on every carrier on the planet? 

 

I pasted your original reply below. 

 

 

"A couple thoughts. One, unified chips tend to be less power efficient that those designed for a specific task, not to mention there are cost and size considerations. Two, I would expect any country that still uses CDMA will have a different SKU for each CDMA MNOs due to the way the chipsets needs to be flashed to support a specific CDMA carrier."

 

Never argue with an idiot. They will only bring you down to their level and beat you with experience. 

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Never argue with an idiot. They will only bring you down to their level and beat you with experience. 

Reply
post #37 of 40
Quote:
 

 

Here's something to find out.  Out of the other China based carriers, what's Apple's market share?  20%, 30%?  Is it growing, staying stagnant or shrinking?  

 

Let's run a couple of what ifs.  Let's assume for a second that the other carriers have 20 and 30% of their subscribers are iPhone users, so it's possible that CM could see the same market share numbers within their own market over the course of 3 years.

 

740 Million subscribers total x .2 =  148 Million iPhone users

740 Million subscribers total x .3 =   220 Million iPhone users

 

There is no way Apple's market share is even close to 20%-30% on the other carriers.  It is probably close to 10-11%.  You really need to research the Chinese market.  Out of the 1.2B mobile users, only 300-400M are even on 3G/4G networks.  Yes, the Chinese is getting more wealthy and can afford more luxury goods.  But the wealth is not spread very well.   Maybe the top 20%-25% can afford an iPhone (which is still a market just as big as the US).  But for your 20-30% market share, ALL these people would need to buy iPhones.  I think at best, it is a 50/50 split at the high end..

post #38 of 40
Quote:
Originally Posted by gwmac View Post

Sure, I will be happy to explain that once you admit you were wrong about a universal front end needing to be less power efficient. You also mentioned size considerations even though the RF360 is smaller. You also said the chipsets for CDMA need to be flashed to support a different CDMA carrier is also inaccurate since they use a MEID database and only allow ones in their database so no flashing required. Once you address your three errors lets address the possibility they they would indeed have separate SKU's. By the way you do realize that printing separate SKU's on a box would be a lot cheaper than actually producing dozens of more actual models. An iPhone with a RF360 would mean far fewer actual iPhone lines needed to be run at Foxcomm and other assembly lines resulting in cost savings for Apple. That is the true savings benefit. Who cares if they have the same number of Sku's printed on the boxes when they can essentially make one iPhone that can be used on every carrier on the planet? 

I pasted your original reply below. 


"A couple thoughts. One, unified chips tend to be less power efficient that those designed for a specific task, not to mention there are cost and size considerations. Two, I would expect any country that still uses CDMA will have a different SKU for each CDMA MNOs due to the way the chipsets needs to be flashed to support a specific CDMA carrier."

1) My comments are correct. When you take multiple chips doing multiple functions that need to be switched they tend to use more power, be larger, more complex, and more costly. This is in no way the universal constant you claim I stated as I clearly used the word tend, but you still haven't shown that these chips will in fact be more power efficient, at a given node, than bespoke chipsets designed for a specific carrier and region.

2) We're not talking about Foxconn production lines for various HW, we're taking about SKUs. You are the one that specifically stated there will be less SKU down to just ones based on color and storage. You're the one who is claiming that Apple will not need a different SKU for a Verizon 32GB White iPhone 6 v a Sprint 32GB White iPhone 6. You're also the one that hasn't yet proven that Qualcomm's solution will allow for an after-factory accessible method of switching CMDA MNOs.

3) You piqued my interest with your claims of what I've wanted to have happen for over a decade now but it seems like you're trying to weasel out of your initial claim. Why is that? Did you miss interpret the literature? Were you too over zealous in your desire for it to be true? I hope you're correct but so far you've provided no proof of your initial comments.

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

 

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

 

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post #39 of 40
My gut tells me that 17mm iPhones over the entire year is a bit too conservative. When the estimate is that Apple has at least 70mm potential customers on that carrier alone? I%u2019d be expecting more like 25 ~ 30 mm for the year.

My guess is as good as that analyst%u2019s though...
post #40 of 40
Quote:
Originally Posted by tribalogical View Post

My gut tells me that 17mm iPhones over the entire year is a bit too conservative. When the estimate is that Apple has at least 70mm potential customers on that carrier alone? I%u2019d be expecting more like 25 ~ 30 mm for the year.

My guess is as good as that analyst%u2019s though...

 

Yeah, I think it's VERY conservative. Some analysts are like that. They would rather be conservative in their predictions than be too liberal about it. It's the way a lot of them are trained.   I would wait for more analysts to give THEIR insight, and then take the average and then use whatever Apple THINKS and use my own thoughts to arrive at what I felt was reasonable and then see what happens.

 

I think the real number is going to be between 20 and 70 Million units for the first year and that depends on production levels, what other models they release through China Mobile and at what time.  But that's about as close as I'm going to get at this point in time and will reserve the right to narrow down the number after at least one quarter's worth of sales.

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