Analysts argue Apple/China Mobile deal still a matter of time


Though Dec. 18 is set to come and go without a much-anticipated China Mobile (CHL +1.6%) iPhone deal arriving, the sell-side still sees the issue as merely one of timing.

Wells Fargo notes CHL's management recently said the carrier already has as many as 50M iPhones on its network, and thinks another 15M could be added in 2014.

BMO observes CHL is looking to sell 100M 4G phones in total next year - that's a positive for Qualcomm (QCOM), provided regulators don't get in its way - and wonders if Apple (AAPL -0.8%) wants to have a separate iPhone announcement, rather than take part in a broader CHL service launch event (such as today's)

Wedge Partners is a little more cautious: While believing a China Mobile deal could happen in Q1 and pointing out some CHL branches have already begun selling unsubsidized iPhones, it thinks the world's biggest carrier might not begin promoting the iPhone until 2H. The firm expects total Chinese iPhone sales will only rise to 34M-35M in 2014 from 33M in 2013.

Earlier: Apple lower premarket following China Mobile, Jabil news

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Comments (29)
  • Cintos
    , contributor
    Comments (198) | Send Message
     
    I'd love to see the press release where either Apple or CHL ever stated a deal date. It has, as usual, been another case of the Anal-ists declaring their desire and then pounding Apple when Apple does not comply with their wishes.
    18 Dec 2013, 05:16 PM Reply Like
  • Braeburn
    , contributor
    Comments (1689) | Send Message
     
    Not ANAL-ists BUTT GOSSIP columnists
    18 Dec 2013, 06:56 PM Reply Like
  • Elusio Barbarossa
    , contributor
    Comments (104) | Send Message
     
    The quote is from Chiana Daily and odds seem high for a deal not being far away:

     

    " "China Mobile has yet to reach an agreement with Apple, but good news deserves to be waited for, and we expect to release cooperation information soon," Xi Guohua, chairman of China Mobile, said at the China Mobile Global Partner Conference 2013 in Guangzhou.
    ...
    China Mobile's Beijing branch began taking online orders for unidentified fourth-generation "star models" of smartphone models last week.
    ...
    A China Mobile official who requested anonymity said the "big picture" of cooperation between China Mobile and Apple has been settled, but some details require further negotiation.""

     

    Link: usa.chinadaily.com.cn/...
    19 Dec 2013, 06:44 AM Reply Like
  • jjkiam
    , contributor
    Comments (403) | Send Message
     
    Would someone please explain how the reported number of IPhones already on CHL keeps growing so high? Now the figure used by one of the analysts is 50 million. And this doesn't count the Iphones on the 2 smaller carriers? That would mean that Apple has sold over 100 m IPhones in China? Is that possible? I don't think so. I think these numbers get estimated by an analyst and then repeated so often that people begin to just accept them without asking how they arrived at this sum! Given that Apple has just really started to seriously sell into the Chinese market over the last 2 years, I have major skepticism about the accuracy of these estimates!!! But I would gladly welcome someone's response that could educate me as to where I am mistaken
    18 Dec 2013, 05:24 PM Reply Like
  • Ryan Sullivan
    , contributor
    Comments (22) | Send Message
     
    Most of these are second-hand phones. What happens when you sell your old 3G or 3GS and upgrade to a shiny new 5S? Your old phone gets shipped over to China. Apple doesn't get any money off the sale, but the number of iPhones on the China network is quite high.
    18 Dec 2013, 09:11 PM Reply Like
  • aardvark3
    , contributor
    Comments (658) | Send Message
     
    Good things come to those who can wait. I'm happy to wait because it's going to be very good.
    18 Dec 2013, 05:25 PM Reply Like
  • gcgretired
    , contributor
    Comments (39) | Send Message
     
    The oft heard common wisdom/assumption is that "Apple needs China Mobile more than China Mobile needs Apple." I don't buy it. China's 2nd and 3rd largest telecoms have made gains in market share directly attributable to their carrying the iphone; losses that CM is anxious to stem. If the millions of CM subscribers who have been waiting for the CM/Apple deal, considered an inevitable sure thing by most, get the feeling that no deal is coming many would leave CM for the other telecoms.

     

    China Mobile wants this deal badly and I'm glad Tim Cook is a tough negotiator.
    18 Dec 2013, 05:40 PM Reply Like
  • hko2012
    , contributor
    Comments (752) | Send Message
     
    Did you know that China Mobile's 3G network was incompatible with the iphone so the deal didn't happen. Now the 4G network is compatible but China Mobile still only announced Samsung and local players. That is even though a "deal" was announced by Western media. Now that's what I call a FU attitude by China Mobile.
    19 Dec 2013, 03:24 AM Reply Like
  • Azazello
    , contributor
    Comments (1779) | Send Message
     
    Now, if you are REALLY trying to figure out markets you would post both Apple and Samsung threads—but she does NOT. She comes only to contest Apple. Why not to cheer on the troops in South Korea and its investors world-wide (click on comments SVP)
    2 Jan 2014, 04:44 PM Reply Like
  • Hank890
    , contributor
    Comments (2119) | Send Message
     
    CHL may simply want to sell as many unsubsidized phones as possible,.. BEFORE making an announcement and selling iPhones at the subsidized price. It will help CHL's bottom line to extract the maximum consumer surplus first.
    18 Dec 2013, 05:52 PM Reply Like
  • John N. Heil
    , contributor
    Comments (237) | Send Message
     
    A lot of silly chatter today about when the deal will be completed. It matters little at the present time. Apple's first quarter is in the bag for a massive beat without China Mobile fully on board. Both companies need the deal and the timing is right for the first quarter of calendar 2014, given the Chinese New Year as well as the boost it gives Apple's Q2.

     

    The point is, today was a fantastic buying opportunity and probably the last obvious one going forward. My estimate for fiscal 2014 remains $46. to $47. per share with a China Mobile deal by March.

     

    Big J in L.A., retired security analyst, The Foristall Co.
    18 Dec 2013, 07:04 PM Reply Like
  • flabingo1
    , contributor
    Comments (81) | Send Message
     
    Tim Cook was with Obama yesterday. Does not make sense that the announcement would come last night?
    Problem with Apple is that Tim Cook is still the COO and the financial planning etc is left to Oppenheimer and the board.
    With all their borrowing power, would Buffet be sitting on all that cash? They have never made a big acquisition, and not likely to start at their present size in their field.
    The traders love Apple because there is a limited downside with the cash, earnings and low PE. S&P PE is 19 and Apple is 14.
    18 Dec 2013, 07:52 PM Reply Like
  • flabingo1
    , contributor
    Comments (81) | Send Message
     
    Would it be ethical for Apple to buy their stock today, knowing that there would not be an announcement?
    18 Dec 2013, 07:54 PM Reply Like
  • rubber duck
    , contributor
    Comments (194) | Send Message
     
    They can buy the dip same as you and me. It would only be unethical if they led people to believe there would be an announcement today, which they never did.
    18 Dec 2013, 08:01 PM Reply Like
  • flabingo1
    , contributor
    Comments (81) | Send Message
     
    Great answer
    18 Dec 2013, 09:48 PM Reply Like
  • JG2000
    , contributor
    Comments (492) | Send Message
     
    So far the stock is handling the disappointment pretty well. This supports the notion that it wasn't heavily priced in. This could be a pending positive to fill the calendar Q1 lull (but note to self: don't count your chickens before they're hatched).
    18 Dec 2013, 08:42 PM Reply Like
  • flabingo1
    , contributor
    Comments (81) | Send Message
     
    If you are a long term investor, then it is a buying opportunity
    But if you own January calls, you are upset. Interesting the wizards that suggested that the stock could fall to 510.
    Question is Apple better off if a person buys the IPhone is the USA and ships it to China, or buying it in China?
    I think everything is connected to Chinese New Year on January 31
    Final question
    What would be the effect on Michael Blair's income. If we boycotted his site on SA?
    18 Dec 2013, 10:01 PM Reply Like
  • Riverrun
    , contributor
    Comments (263) | Send Message
     
    I'll ask M. Blair what's up.
    18 Dec 2013, 08:47 PM Reply Like
  • ispank
    , contributor
    Comments (1113) | Send Message
     
    China Mobil is taking pre-orders, check out this link folks.

     

    http://bit.ly/1bRmjNU
    18 Dec 2013, 10:28 PM Reply Like
  • Book value
    , contributor
    Comments (94) | Send Message
     
    Thank you for the link! Here's a Google translate:

     

    China Mobile Zhejiang designated operating room, websites, hotlines and other channels open 10086 Mobile 4G iPhone 5S book, users can book more than three channels through mobile 4G iPhone 5S, book and successfully purchased the user will receive a 4GB province 3 / 4G mobile data traffic. Activities Specific rules are as follows:
    ● Scheduled activities Hours: December 18, 2013 - December 31, 2013
    ● Users need to provide your name, ID number, phone number, contact information when booking.
    ● After the reservation is successful, the need to maintain the smooth flow of mobile phones, mobile companies will continue to contact the user to move after the arrival of the specified operating room to buy.
    ● You must make an appointment and successfully handle 4G exclusive purchase tariff (including 4G or 4G high-speed flow wrap package to enjoy fly).
    ● Appointment and successfully purchase the user will receive a 4GB province 3/4G flow, respectively, in the month of purchase and the time of each monthly Mini 2GB, expired automatically lapse.
    ● Due to uncertainties delivery cycle, the arrival time of the phone is currently not clear, moving the company will notify the customer the first time after arrival.
    Moving company will give priority to ensuring customers purchase an appointment.
    19 Dec 2013, 06:23 AM Reply Like
  • flabingo1
    , contributor
    Comments (81) | Send Message
     
    Why would CHL give up Chinese New Year?
    19 Dec 2013, 12:55 AM Reply Like
  • Piero A.
    , contributor
    Comments (333) | Send Message
     
    CM said they would announce a new brand partner on the 18th. Who is this brand partner? No one seems to be asking questions about the comment they made. The deal announcement is days away.
    19 Dec 2013, 01:00 AM Reply Like
  • SA User 74XXXXX
    , contributor
    Comments (833) | Send Message
     
    There has been no China Mobile deal bubble priced in the stock. If a portion of the recent stock run was due to China Mobile, it is normal because China Mobile users are already buying iPhone 5s/c which support their proprietary 3G & 4G.

     

    In the past no iPhone supported China Mobile's 3G and a deal would mean China Mobile to give Apple access to a 700+ million user base with custom-made iPhone. Now the meaning of a deal is largely a commercial one, e.g. whether China Mobile will greatly subsidize iPhones in order to promote 4G penetration in China.
    19 Dec 2013, 01:25 AM Reply Like
  • consultnick
    , contributor
    Comments (345) | Send Message
     
    Honestly speaking--I'm real happy that we haven't got the big Chinese Tiger in the bag just yet. Why? Because have sooo much good stuff going on in this quarter that it would have amounted to little more than a little stock bump. We need Mr. Market to pay attention to all of the other good things that are already happening--like a huge HOLIDAY season!

     

    The end of 2013 should reveal the naked stupidity of the professional curmudgeons, forcing them to realize AAPL's completion of a true turn-around, and that it has risen phoenix-like from its ashes. It's looking bigger and badder than ever! We can wait for Chinese good news, and wait for Apple TV, and wait for the iWatch, and wait for iBank or iPay, etc., etc. Let's just savor what we have going on right now. Nice and slow--gradually and maddeningly upward.

     

    Where is Trainer now--with his price target of 260? Blair grinds out his excruciatingly complex and convoluted screeds that show he has been drug kicking and screaming off his here-to-fore uber-bearish position--hedging himself, and fairly well proving the maxim that even a broken clock can be right twice day--especially in the relative safety of options.

     

    No need here to recapitulate the incredibly long list of things AAPL is doing right--spanning labor relations, product innovation, and financial engineering....the list goes on and on. Mr. Market will soon abandon the mesmerizing rants about meaningless market share and useless rumor-mongering, and will soon be staring at outrageous amounts of cash earned and massive amounts distributed to shareholders of the greatest company in the world. The news is good....getting better....and is sustainable.
    19 Dec 2013, 01:40 AM Reply Like
  • Humble Eagles
    , contributor
    Comments (2740) | Send Message
     
    I have China Mobile fatigue.
    19 Dec 2013, 11:01 AM Reply Like
  • Jettster
    , contributor
    Comments (2) | Send Message
     
    Could care less. I've been burned so many times trading AAPL calls I feel Fire Marshall Bill. The best strategy for trading is think what is logical and do the opposite.
    20 Dec 2013, 08:58 AM Reply Like
  • flabingo1
    , contributor
    Comments (81) | Send Message
     
    I think it all ties into Chinese New Year which begins two weeks before January 31
    20 Dec 2013, 12:45 PM Reply Like
  • flabingo1
    , contributor
    Comments (81) | Send Message
     
    Does the Target problem create a big opportunity for IPAY?
    And does it raise the bar that they have to get it right? Two different fingers, voice recognition, and password. Throw it your eye, and even Clouseau could not figure it out
    20 Dec 2013, 12:51 PM Reply Like
  • Tales From The Future
    , contributor
    Comments (7385) | Send Message
     
    Futher caution about short-term CHL impact:

     

    ""While we think China Mobile can be a bigger source of iPhone sales over time, we prefer to be cautious for a couple of reasons," Moskowitz wrote. "one reason is that there are more than 40 million unlocked iPhones running on China Mobile's network. Secondly, the high-end segment is a smaller portion of China Mobile's subscriber base."

     

    http://bit.ly/1d4dTnC

     

    Of note, only about 135 M out the 700+ M CHL subscribers are even on 3G networks today.
    23 Dec 2013, 03:22 PM Reply Like
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