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Apple's China Mobile deal expected to add 5% to revenue in 2014

post #1 of 14
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Shares of Apple stock surged more than 3 percent on Monday, after news broke that the company has reached a long-awaited deal to begin selling the iPhone in January through China Mobile, the world's largest wireless provider.

China Mobile


Analyst Gene Munster of Piper Jaffray has big expectations for Apple's newly christened deal with China Mobile. He predicts the arrangement will add 5 percent to Wall Street 2014 revenue estimates.

He believes the deal could lead to 17 million additional iPhone sales for Apple in 2014, which would represent 10 percent of China Mobile's 176 million current 3G subscribers.

Maynard Um of Wells Fargo also believes the deal will further boost investor confidence in Apple's March iPhone sales. He expects Apple will sell 42.8 million handsets next quarter, following sales of 54.8 million in the current December quarter.

China Mobile was "worth the wait" for investors, analyst Brian White of Cantor Fitzgerald said. He believes Apple had to negotiate hard to access its 763.3 million subscribers, leading to a lengthy delay before China Mobile became a partner.

"Despite not having an official agreement with China Mobile before Sunday night's announcement, we estimate there are 35-40 million iPhone users on the network at China Mobile," White said in a note to investors on Monday. "Our visits to China Mobile branches, and resellers, and an Apple Retail Store this weekend in China highlighted that China Mobile is offering the iPhone 5s (and iPhone 5c) to customers."

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White is more bullish than others on Wall Street, and predicts that China Mobile will add 20 million to 24 million iPhone sales to Apple's bottom line in 2014.

That's more aggressive than Mark Moskowitz of J.P. Morgan, whose research in the market suggests iPhone units would be around 2 million per quarter in what he called the "initial stages."

"While we think China Mobile can be a bigger source of iPhone sales over time, we prefer to be cautious for a couple of reasons," Moskowitz wrote. "one reason is that there are more than 40 million unlocked iPhones running on China Mobile's network. Secondly, the high-end segment is a smaller portion of China Mobile's subscriber base."

Finally, analyst Timothy Acuri of Cowen and Company sees the China Mobile deal as a source of potential upside for Apple's forthcoming March quarter. He feels confident his estimate of 39 million iPhone sales in the coming quarter will be achieved thanks in part to the new agreement.

In all, Acuri believes China Mobile could add 20 million iPhone sales in calendar 2014, with upside going as high as 30 million.

Monday's gains for AAPL stock stand in contrast to last week, when an official China Mobile announcement was expected. When that didn't happen, the company's shares dipped, as investors have been heavily anticipating the agreement.
post #2 of 14
I'm sure Gene came all over his keyboard on this news. Don't want to think about what he'll do if Apple should release a TV¡
"See her this weekend. You hit it off, come Turkey Day, maybe you can stuff her."
- Roger Sterling
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"See her this weekend. You hit it off, come Turkey Day, maybe you can stuff her."
- Roger Sterling
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post #3 of 14
"more than 40 million unlocked iPhones running on China Mobile's network"

But the new 5s and 5c are actually compatible with the high speed systems of CM, the previous models are not. So a lot of those 40 million might turn over....
post #4 of 14
How does the author not know how to spell quarter?
post #5 of 14

I do not know what to say about revenue but I just know that I said here long back when Apple was at 425 or something that I got 2014 and 2015 Calls.

 

Also I said this few days ago when AAPL was near 538 (See the timing of the post was perfect lol- Not bragging, just feel nice :))---->

Quote:
Originally Posted by helicopterben View Post
 

Good time to buy 2015 Jan calls! 

 

BUY BUY BUY BOOYAAHHH :lol:    Fuk the WS!

 

 

Now I say Fuk the 5%  :lol:------> This one is going to all time highs in 2014 as mentioned previously in many of my post :wow: 

post #6 of 14
"When that didn't happen, the company's shares dipped, as investors have been heavily anticipating the agreement."

Lemmings.

Sent from my iPhone Simulator

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Sent from my iPhone Simulator

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post #7 of 14

5% revenue growth is preposterous for a deal this size.  It will be more like 20%.

post #8 of 14
Yes, it's 'more than 3%' but a 3.84% gain is closer to 4%.
post #9 of 14
Tim Cook is doing a great job as COO, but he does not have the background or education to be CEO. Therefore there is a vacuum with Peter Oppenheimer as chief financial officer.
The management of their cash and earnings power gives them a great opportunity to leverage their assets. Carl Icahn has an idea of buying back their stock, which brings up the question, which hopefully will be addressed by the Board of Directors, who are elected by the stockholders. When you look at Amazon who are the other extreme of leverage, you would think there is a middle ground. Speak up stockholders, and Apple customers.
post #10 of 14
Actually, China Mobile was offering 3G compatible iPhone 5 to (Premium) Go Tone users from last summer as a placeholder to keep them from jumping ship to China Unicom or China Telecom who could offer this service.

How it worked was to offer a 2 year subsidized iPhone 16GB with options to pay in for 32Gb or 64Gb models.

I used my Go Tone offer to take a 32Gb for my wife who will now hand it back to me to trade up to a 64Gb 5S.

These offers were never officially announced or published but just offered to qualified Go Tone customers, which is a bit unusual because subsidized phones are not common here but rather free phones of older models usually offered as loyalty incentives.

It was clear to me when I got the offer that China Mobil was close to a deal and feeling some pressure from defections of premium account users, who are naturally the most likely to be potential iPhone customers.

In fact, I had mentioned this a few months back on Apple Insider.

Now I can go back to trade up in about a year, cost should be low once the pent-up demand is satisfied.
post #11 of 14
Quote:
Originally Posted by Flabingo View Post

Tim Cook is doing a great job as COO, but he does not have the background or education to be CEO.

By your criteria, Steve Jobs was even less qualified.
Quote:
Originally Posted by Flabingo View Post

Therefore there is a vacuum with Peter Oppenheimer as chief financial officer.
The management of their cash and earnings power gives them a great opportunity to leverage their assets. Carl Icahn has an idea of buying back their stock, which brings up the question, which hopefully will be addressed by the Board of Directors, who are elected by the stockholders. When you look at Amazon who are the other extreme of leverage, you would think there is a middle ground. Speak up stockholders, and Apple customers.

Gibberish.

I admit to being a Fanatical Moderate. I Disdain the Inane. Vyizderzominymororzizazizdenderizorziz?

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I admit to being a Fanatical Moderate. I Disdain the Inane. Vyizderzominymororzizazizdenderizorziz?

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post #12 of 14

Gene Munster, an analyst at Piper Jaffray, expects 17 million in iPhone sales at an average price of $525. He expects an increase of 5.2% in revenues for Apple.

post #13 of 14
Quote:
Originally Posted by ashleyjames389 View Post

Gene Munster, an analyst at Piper Jaffray, expects 17 million in iPhone sales at an average price of $525. He expects an increase of 5.2% in revenues for Apple.

With apologies to a certain meme: One does not simply cite Gene Munster as a reliable source.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #14 of 14
Quote:
Originally Posted by SpamSandwich View Post


With apologies to a certain meme: One does not simply cite Gene Munster as a reliable source.

 

Saw this coming :) Other analysts like Toni Sacconaghi at Sanford C. Bernstein and Katy Huberty at Morgan Stanley are also expected similar results. Won't be surprised if Apple and CM pull this off 

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