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Piper Jaffray: China Mobile means 17M more iPhones sold over 2014

updated 06:05 am EST, Mon December 23, 2013

Munster sees China Mobile deal bumping AAPL by five percent

Apple's new deal with China Mobile could net the iPhone maker an additional 17 in unit sales over the course of 2014, according to a new analysis. This according to Piper Jaffray analyst Gene Munster, who believes that the finalization of the China Mobile deal will prove quite lucrative for the Cupertino tech giant. Despite the potential sales jump that is now possible due to the iPhone being available on the world's largest wireless carrier, Piper Jaffray is taking the conservative approach and not altering its price targets for the company until Apple reports new sales figures.

Munster's report posits that the China Mobile deal could add an additional five percent to current Wall Street revenue estimates for the iPhone maker. That estimate assumes an average sale price of $525 in China and $575 in the rest of the world, with 17 million units sold through China Mobile. The arrival of the iPhone on China Mobile could lead to two percent of the carrier's base adopting Apple devices, according to Piper Jaffray's estimates.

While apparently small at first glance, that figure is two percent of China Mobile's more than 760 million subscribers. Apple would also be grabbing the most lucrative of China Mobile's subscribers, about 10 percent of the carrier's customers that are on its 3G-or-higher networks.

The analyst firm notes that, should Apple update its iPhone in the fall - as it typically does - this would likely push the iPhone 5c into the low-cost iPhone slot, currently occupied by the iPhone 4S and the iPhone 4. Lower pricing for the iPhone 5c, which is essentially an iPhone 5 in a polycarbonate casing, could prove much more attractive in the Chinese market.

Despite the potentially sizable expansion in iPhone owners, Piper Jaffray is maintaining a cautious outlook on AAPL. The firm set a price target of $640 for the stock, with a calendar year 2014 earnings0per-share estimate of $45.73.

by MacNN Staff



  1. iphonerulez

    Dedicated MacNNer

    Joined: 11-28-08

    One thing that's hard to understand is that the news media is always talking about China's growing wealth and the increase of the middle-class with spending cash. All of a sudden, as soon as the iPhone comes to China, then all the wealth has suddenly dried up and Apple comes out on the short end. I suppose it's what you might call selective wealth and Apple's iPhone doesn't get any. It sure did seem as though when those Apple stores opened in China, those people couldn't get enough of Apple products and there were claims that China wanted more Apple retail stores. There must be a huge gap between hype and reality if Apple will only be able to sell 17 million iPhones on China Mobile for all of 2014. It's a real disappointment for Apple shareholders. Another country where Apple can't manage to get any decent market share as Android takes everything, as usual. Apple really needs to put a serious hurt on Google but so far Google remains well out of reach of Apple's payback.

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