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Apple roundup: China Mobile, iPad Mini forecasts, memory M&A speculation

  • Bloomberg observes China Mobile (CHL +0.1%) is widely believed to be driving a hard bargain in its iPhone talks with Apple (AAPL -0.3%).
  • Avondale's John Bright: "Apple’s unwillingness to provide meaningful concessions and China Mobile’s unwillingness to subsidize a high-cost device have inhibited a deal until now." HSBC's Tucker Grinnan thinks the world's biggest carrier wants a cut of App Store sales as part of any deal.
  • CHL's ability to post decent 3G sub growth in spite of lacking the iPhone has arguably given it more leverage. Bloomberg's column comes amidst speculation a Beijing iPhone satellite event could include a CHL announcement.
  • KGI's Ming-Chi Kuo now thinks a retina iPad Mini will launch by the end of 2013 (along with a 5th-gen regular iPad). That's in-line with an Aug. Bloomberg report.
  • Kuo also believes a new non-retina Mini will launch in early '14 to take on cheap Android tablets that have been rapidly gaining share (particularly in emerging markets), and that both the retina Mini and 5th-gen iPad will use a new A7X CPU (the 4th-gen iPad uses the A6X).
  • IHS thinks Apple may need to acquire a DRAM/NAND flash memory manufacturer, to secure supply, develop custom parts (something suppliers have been reluctant to do for Apple), and match Samsung's level of vertical integration.
  • The firm argues Micron (MU +2.8%) "could be a logical [M&A] candidate." But with a market cap of $15.7B, it definitely wouldn't come cheap. Apple bought NAND controller developer Anobit last year.
Comments (8)
  • Doyle3000
    , contributor
    Comments (1256) | Send Message
     
    good point that CHL gains leverage with each % of growth without AAPL. Tim has to make this deal sooner rather than later now. Even if it's not at the margin they had hoped for, it'll work out.
    5 Sep 2013, 11:04 AM Reply Like
  • MJ Pragmatist
    , contributor
    Comments (104) | Send Message
     
    However, if they simply give into China Mobile, other large carriers will start to demand some of the same terms and conditions.
    5 Sep 2013, 11:59 AM Reply Like
  • rocback
    , contributor
    Comments (975) | Send Message
     
    Nah, China Mobile needs Apple more than it needs China Mobile.
    5 Sep 2013, 02:26 PM Reply Like
  • Skippy09
    , contributor
    Comments (1439) | Send Message
     
    Exactly right, rocback. China Mobile is losing market share because it does not yet offer iPhones.
    9 Sep 2013, 10:00 PM Reply Like
  • kimboslice
    , contributor
    Comments (1464) | Send Message
     
    Apple does not need to cave in to the China Communist party who own China Mobile.
    Apple sells tens of millions of devices each quarter, Cook isn't in a big hurry to cave in to them.
    5 Sep 2013, 11:55 AM Reply Like
  • imac007
    , contributor
    Comments (441) | Send Message
     
    CHL's real leverage is the roughly 700M subscribers it has. Apple is gaining leverage as CHL is building out its 4G capability its subscribers are going to want iPhones. They already have 10M iPhones in use on their network. Growing subscriber demand is Apple's leverage.

     

    As to getting a share of app revenue, that shouldn't happen. It's comparable to any business that takes a phone order having to pay a percentage to the phone company.
    5 Sep 2013, 12:12 PM Reply Like
  • hughmike
    , contributor
    Comments (68) | Send Message
     
    Would the DOJ even allow the acquisition of MU to happen?
    5 Sep 2013, 01:15 PM Reply Like
  • imac007
    , contributor
    Comments (441) | Send Message
     
    nAndpocolypse!!!
    Eeek!!!! an inferno at Hynix in the news.
    According to China Post, in June, Samsung were hoarding their production for themselves and

     

    "First, Apple Inc. has bought up nearly 50 percent of the NAND production capacity of other major memory module makers SK Hynix, Toshiba and SanDisk capacity, as the U.S. consumer electronics giant will launch new models of its iconic iPhone and iPad in the second half of the year.

     

    Apple has also sucked up 80 percent of Elpida Memory Inc.'s mobile DRAM production capacity, the report said.

     

    Second, NAND production lines of major U.S. memory module manufacturers Micron Technology Inc. and Intel Corp. have all been used to produce their own brand-name SSDs, according to the report."

     

    Apple's business model suggests they will not buy a supplier. They acquire technology, for the patents, like Anobit and AuthenTec. When they re-invent they want to own the technology, through patents, so may acquire for patents. Without patents, others can just reverse engineer, as that is cheaper than R&D. Innovation means integrating the latest and best, into your design. That requires flexibility, which may mean switching suppliers. Apple's core business is innovation and design. They may invent, but get others to manufacture and assemble.
    5 Sep 2013, 03:19 PM Reply Like
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