China Mobile Might Sell iPhone; Apple Soars 2 comments
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Apple shares surged 10.5% to close at $169.86 Tuesday, their biggest one-day gain in over a year, after China Mobile CEO Wang Jianzhou said the carrier is in talks to sell the iPhone in China.
China Mobile is the largest wireless operator in the world with 350 million subscribers. No agreement is in place as yet because the companies are still coming to terms on revenue sharing. "Our customers like this kind of fashionable product," Jianzhou said at the GSMA Mobile Asia Congress in Macau. "The biggest issue is the business model." China Mobile already has an agreement to sell Research in Motion's Blackberry. AT&T, Apple's U.S. partner, is estimated to pay Apple $10-20 per month per subscriber. AT&T has activated 1.1 million of the 1.4 million iPhones sold since the device was released in June. This month, the iPhone will begin selling in the U.K., Germany and France through Telefonica, Deutsche Telekom and France Telecom, respectively. China Mobile is expected to sell the iPhone only to those customers who subscribe for Web access over its network. "China Mobile wants to sell the iPhone and BlackBerry handsets for the same reason, and that's to get people to spend more money," said Guotai Junan Securities analyst Tiffany Feng. However some analysts wonder what proportion of China Mobile's subscribers will be able to afford the iPhone, since many of them come from rural areas. China Mobile's shares gained 7.8% to close at $87.03 Tuesday.
Commentary: China Mobile Beats Q3 Estimates on Strong Rural Growth • Apple's iPhone in a Class (and Category) By Itself • AT&T Paying Apple $18/Month Per iPhone Customer - Analyst
Stocks to watch: AAPL, CHL. ETFs: FNI, EEB, ADRE
Earnings call transcript: Apple F4Q07
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