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Apple makes new 2013 highs; China Mobile says talks ongoing

  • Following the WSJ's report about a China Mobile (CHL -0.3%) deal, Apple (AAPL +0.9%) is up 27% from its mid-September low, and (after falling hard to start the year) up 7% YTD.
  • The gains come even though China Mobile has responded to the WSJ's report by stating it's "still negotiating with Apple." The world's biggest carrier has long been rumored to be driving a hard bargain with Apple, which itself has plenty of experience on that front.
  • As is their custom, analysts have been firing up their spreadsheets to estimate the impact of a China Mobile deal. Uber-bull Brian White thinks the deal could yield 20M-24M additional iPhone sales in 2014, boosting EPS by $4. Gene Munster is a little more cautious, forecasting 17M 2014 sales, as is Pac Crest's Andy Hargreaves, who sees only a $2 2014 EPS boost.
  • Munster notes that while 16GB iPhone 5S and 5C respectively cost $846 and $718 unsubsidized in China, China Mobile has an estimated unsubsidized smartphone ASP of $270 (Verizon, by contrast, is at $449). The rising popularity of large-screen smartphones in China could also act as a headwind (at least until Apple launches one of its own).
Comments (27)
  • jjkiam
    , contributor
    Comments (388) | Send Message
     
    Now is when all the analysts will attempt to offer their take on what a deal actually will mean in sales. Most will now try to downplay the relative importance of this deal with all sorts of predictions about format size preference and unsubsidized ASP as reason for minimizing the number of phone Apple will sell. For once, It would be nice to see how many of them were correct about what the Docomo deal would mean in sales. How many of them estimated the kind of results being reported in Japan? I really wish someone with access to this information would publish this
    5 Dec 2013, 04:05 PM Reply Like
  • newsagg
    , contributor
    Comments (20) | Send Message
     
    Wonder what it will do to black market aisles in the USA for shipment to China
    5 Dec 2013, 04:16 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (2150) | Send Message
     
    The quote I saw didn't actually deny the WSJ report explicitly. What they said, according to Reuters, was: "We are still negotiating with Apple, but for now we have nothing new to announce," so they may simply be trying to keep a little bit of suspense.
    5 Dec 2013, 04:18 PM Reply Like
  • NY2LA 1
    , contributor
    Comments (584) | Send Message
     
    Their management is saving the news for the Dec. 4g announcement. It's just protocol. I think it's a done deal but a deal this big their top brass would want to make the announcement personally.
    6 Dec 2013, 08:34 AM Reply Like
  • dbt01
    , contributor
    Comments (592) | Send Message
     
    I think 50M for the year is more like it. 20M out of 750M seems way too low.
    5 Dec 2013, 04:50 PM Reply Like
  • Dennis Baker
    , contributor
    Comments (1371) | Send Message
     
    Keep in mind not everyone is going to upgrade at once, churn is usually 2-3 years so whatever their share of total subscribers will be we won't know until a few years down the road. If they wind up with 5% share, that would be 37.5m, if it takes 2 years to get there, we're looking at 15-18.7 million units a year.
    5 Dec 2013, 05:20 PM Reply Like
  • dbt01
    , contributor
    Comments (592) | Send Message
     
    MB in three, two, one...
    5 Dec 2013, 04:50 PM Reply Like
  • Topaz512001
    , contributor
    Comment (1) | Send Message
     
    With a range of $2-$4EPS what does this translate in projected share price? I am new to this and need to learn.
    5 Dec 2013, 04:51 PM Reply Like
  • Fedman
    , contributor
    Comments (29) | Send Message
     
    Well, for a real rough but simple guess you take the current P/E ratio, about 14, and multiply it by $2 and $4 and say $28-$56 per share. Yes I realize that there are lots of other potential considerations, but for a rough number without getting too hung up on assumptions I'd go with that for a share price range.
    5 Dec 2013, 05:42 PM Reply Like
  • jazzfan1
    , contributor
    Comments (93) | Send Message
     
    Very sad and very true....
    5 Dec 2013, 05:03 PM Reply Like
  • mphill47
    , contributor
    Comments (573) | Send Message
     
    I hope that Cook strays from the Steve Jobs model of insisting he knows what the consumer wants. The Chinese clearly like the bigger screens. I say quit being so stubborn and give it to them......and us as well.
    5 Dec 2013, 05:15 PM Reply Like
  • scott trader
    , contributor
    Comments (5420) | Send Message
     
    Guess we will have to wait for the December 18th announcementI kinda thought it was too good to be true...wsj loses credability...
    5 Dec 2013, 05:19 PM Reply Like
  • iOS7 needs to revolutinize
    , contributor
    Comments (89) | Send Message
     
    Koreans and Chinese are the same race.
    5 Dec 2013, 05:20 PM Reply Like
  • Gary Bushwacher
    , contributor
    Comments (544) | Send Message
     
    I see the "still negotiating" comment from CM as basically meaning --

     

    "We're not confirming and we'll be the ones that announce if and when we deem appropriate"
    5 Dec 2013, 05:28 PM Reply Like
  • ninderad
    , contributor
    Comments (47) | Send Message
     
    Somebody knows about Tim Cook leaving for China 15 december?
    5 Dec 2013, 06:47 PM Reply Like
  • pierrerion
    , contributor
    Comments (19) | Send Message
     
    Is this rhetorical?
    6 Dec 2013, 12:59 AM Reply Like
  • kimboslice
    , contributor
    Comments (1582) | Send Message
     
    Apple is gonna sell a lot of iPhones in China.

     

    I also disagree Apple needs to make a bigger phone. It's nice as it is.
    5 Dec 2013, 08:15 PM Reply Like
  • Hope128
    , contributor
    Comments (129) | Send Message
     
    A lot of Chinese prefer a bigger phone to browse web on the subway/train. Do you know how crowded it is in big cities of China? Google "China traffic jam" you can find tons of articles like http://bit.ly/18GFHj1. Even you can afford a car, you still have to take public transit during peak traffic time.

     

    4" is a nice size most US people prefer, I wish next iphone keep 4" but also provide a bigger size as option.
    5 Dec 2013, 08:48 PM Reply Like
  • scott trader
    , contributor
    Comments (5420) | Send Message
     
    Kimbo you know I agree with a lot that you post....but they could make a larger phone as an option....not a big stretch IMO...and hopefully someday you get an iPad. Lol..
    5 Dec 2013, 09:19 PM Reply Like
  • Dennis Baker
    , contributor
    Comments (1371) | Send Message
     
    Apple has an 11" and 13" MacBook Air, a 21" and 27" iPad, a 13" and 15" MacBook Pro, a 8" and 10" iPad, hell they have 3 sizes of iPad.

     

    There is definitely room for a second size iPhone. I'm not sure how much it will drive demand, but it certainly won't hurt it. The big questions are around logistics and how it would work with the developer community. Lots of 'Pixel Perfect' apps out there that are going to suffer... even under iOS7 it's still prevalent.
    6 Dec 2013, 06:05 PM Reply Like
  • mphill47
    , contributor
    Comments (573) | Send Message
     
    The CEO of Baidu was on Bloomberg a while back and said that Chinese prefer a large screen (as I do) because many watch movies, tv etc. Rule #1 listen to the customer.
    7 Dec 2013, 04:02 PM Reply Like
  • ninderad
    , contributor
    Comments (47) | Send Message
     
    AAPL 2014:
    New iPhone 6 (large screen/5.38x2.75 inches, TOUCH ID, 64 GB, A7+64-bit, 2048 MB RAM,LTE 4G/china.
    China , Asia and all my friends will love and appreciate this iPhone 6.
    8 Dec 2013, 09:59 AM Reply Like
  • city man
    , contributor
    Comments (13) | Send Message
     
    City man
    Santa Clause see's a lot of children each year, I have to tell that it is a wonder at what children want for Christmas. If I as Santa see 50 children they tell me what they want and about what Apple product like "I-Pad" first "I- phone" second. That results in about 60 present. No other product is stated.
    5 Dec 2013, 09:56 PM Reply Like
  • pocohonta
    , contributor
    Comments (610) | Send Message
     
    Race has nothing to do with it. Even if it does, your generalization about an entire population is grossly inaccurate. Have you even been to these countries? If you did, you wouldn't label them as racists and if you didn't then you don't qualify to put a label on them.
    6 Dec 2013, 02:27 AM Reply Like
  • stevensjm
    , contributor
    Comments (7) | Send Message
     
    I Agee, leave the size as is.
    6 Dec 2013, 09:28 AM Reply Like
  • scott trader
    , contributor
    Comments (5420) | Send Message
     
    Did wsj spoil the surprise party...
    6 Dec 2013, 11:18 AM Reply Like
  • portatopia
    , contributor
    Comments (958) | Send Message
     
    "Both the Japanese and the Chinese are a racist people."

     

    You jamesmarsh sir is a true racist.
    7 Dec 2013, 06:15 AM Reply Like
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