updated 04:05 pm EDT, Fri March 27, 2009
BoA on Chinese iPhone
Apple could control as much as 20 percent of the smartphone market in China if it launches the iPhone there, argues Bank of America analyst Scott Craig. The data is said to be based on Apple's own assertions, as exposed through sources in the company's Asian supply chain. Apple feels it can easily meet the 20 percent target, according to Craig, and may even believe it can do better if given the right circumstances.
In spite of attempts to drain inventory, iPhone production is still said to be slightly higher than predicted, a sign of a continuing strong demand. Craig's FY09 EPS estimates have been raised from $5.26 to $5.31 under GAAP limitations, or from $7.04 to $7.28 when including the deferred iPhone and Apple TV revenue; the target price for Apple stock is now up from $110 to $120.
Should Apple manage to secure a Chinese iPhone deal by mid-year, it is thought that Apple could sell 1.5 million units there in CY09, with another 4.6 million in CY10, and 5.8 million in CY11. The figures are based on a cost of $500 to $600 per phone, though local carriers will likely offer subsidies. More might be sold if the base cost is decreased.