Apple strikes iPhone deal with China Mobile, sales start on Jan. 17

|About: Apple Inc. (AAPL)|By:, SA News Editor

It finally happens: Apple (AAPL) announces it has entered into a multi-year deal with China Mobile (CHL) to offer the iPhone to China Mobile's 760M subs. The iPhone 5S and 5C will be available via China Mobile's retail network, as well as Apple's Chinese stores, on Jan. 17. Pre-registrations start on Christmas. (PR)

Importantly, the phones will work on both China Mobile's new 4G TD-LTE network (just coming out of trial mode), and its existing 3G TD-SCDMA network. Either network would offer a major speed improvement for the tens of millions of existing China Mobile iPhone users currently forced to rely on 2G connections, provided they upgrade.

Analyst estimates for incremental first-year iPhone sales have ranged from less than 10M to as many as 24M, and estimates for the 2014 EPS benefit have often been in the $2-$4 range.

While China Mobile's giant subscriber base and retail reach translate into a major growth opportunity, its low ARPU and the popularity of cheap and large Android phones in China will act as headwinds. Whereas the iPhone 5C starts at an unsubsidized price of ~$735 in China, app analytics firm Umeng estimates Chinese Android phone sales carry an average unsubsidized price of just $233.

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