Seeking Alpha

Wedge Partners offers cautious China Mobile iPhone estimates

  • After tracking sales at Chinese e-commerce sites and regional Apple (AAPL) distributors, as well as talking with Chinese contacts, Wedge Partners' Jun Zhang believes China Mobile took ~100K iPhone 5S pre-registrations over the first two days of availability, and that China Mobile pre-registrations from "open channels" such as e-commerce sites and Apple's stores totaled ~150K.
  • Those figures compare with 270K initial 5S pre-registrations by China Unicom and Telecom in September, and 400K-500K Unicom/Telecom pre-registrations via "open channels."
  • Taking into account China Mobile-related activity, along with its impact on other channels, Zhang estimates total Chinese iPhone sales are now on a 2.7M-2.8M/month run rate, and will be on a 2.8M-2.9M/month run rate in Q1. That's in-line with a prior forecast for 34M-35M 2014 Chinese iPhone sales, up just slightly from 2013's 33M.
  • By contrast, some peers have estimated China Mobile will single-handedly produce an extra 20M+ iPhone sales in 2014. It's worth noting Wedge has been conservative with its iPhone forecasts for some time.
Comments (26)
  • deercreekvols
    , contributor
    Comments (5217) | Send Message
     
    The key to the information are the Chinese "contacts."
    All analysts need "contacts" who can give them the "information" that they need to support their analysis.
    What a joke.
    30 Dec 2013, 06:40 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (1451) | Send Message
     
    The "contacts" told them exactly when and where Apple will roll out all of their phones this year and a birdie said China Mobile won't sell any additional phones! Just great. Could Jun also let us know exactly what Apple's stock price will be on October 15th so we can take the appropriate positions! This would be hilarious if they weren't serious.
    30 Dec 2013, 07:59 PM Reply Like
  • Humble Eagles
    , contributor
    Comments (1451) | Send Message
     
    I wonder if Jun really meant a million phones by next week instead of next year?
    30 Dec 2013, 08:00 PM Reply Like
  • Dennis Baker
    , contributor
    Comments (1119) | Send Message
     
    Fact checking is expensive and time consuming. It's far easier to just parrot BS rather than verify it in some fashion. Also expensive is checking out analysts track record in a given industry. Real journalism is work and regurgitating around BS quotes like this earns just as much as researching a real story.
    31 Dec 2013, 02:06 AM Reply Like
  • benfromchicago2689
    , contributor
    Comments (64) | Send Message
     
    It is extremely puzzling to me that how this "underwhelming of China Mobile pre-order" could almost drive down AAPL by 1.5%. We are talking about Wedge Partners, a tiny firm that no one has heard of before. And Ju Zhang is just one of their equity research analysts. Nothing personal against him but his background is not even in finance or technology.

     

    He claims that he has contact and sources inside China. Hey, I have friends there too. If I post a note that pre-orders for iPhone 5S, 5C or even iPhone 6 are breaking all records, would the stock rally 5%?
    30 Dec 2013, 07:01 PM Reply Like
  • u01bsb0
    , contributor
    Comments (622) | Send Message
     
    use the opportunity to make a trade.
    31 Dec 2013, 08:24 AM Reply Like
  • p2invest
    , contributor
    Comments (146) | Send Message
     
    A total of 15 employees with 5 analysts including the firms founder.
    1 Jan, 04:27 PM Reply Like
  • leopardtrader
    , contributor
    Comments (884) | Send Message
     
    Just another nonsense bear thesis with "information" about "contacts". Have they apologised for all their totally mis-leading "contacts" throughout 2013 ?
    30 Dec 2013, 07:03 PM Reply Like
  • Bobcat9
    , contributor
    Comments (169) | Send Message
     
    Bloomberg TV reported on Friday that initial CHL pre-orders (as of that day, 12/27) for the iphone tallied at 2MM units.

     

    Somebody is VERY wrong...
    30 Dec 2013, 07:14 PM Reply Like
  • samuel_liu
    , contributor
    Comments (2799) | Send Message
     
    maybe CHL is losing money to promote Cn's TD-LTE.

     

    Meaning Apple got generous terms, but don't expect immediate growth. Who really wants to settle on Cn's wireless, most IPhone owners buy it in HK or abroad for less and hookup with Cn Unicom.
    31 Dec 2013, 08:32 AM Reply Like
  • Brandond
    , contributor
    Comments (346) | Send Message
     
    Dumb analysis by an analyst and firm that have no following. For all we know, they are trying to talk down the stock so they can get their clients into Apple cheaper. When earnings and guidance are announced, this stock will make a huge move, analysts will upgrade and people will wonder why they didn't buy Apple at this low valuation. Add a few great products and this could really move; to me, that is the real question-will new products be real growth drivers.
    30 Dec 2013, 07:22 PM Reply Like
  • ninderad
    , contributor
    Comments (36) | Send Message
     
    Latest news China Mobile preorders iPhone 5s (25-27 dec 2013, delivering 17 jan 2014): exceeding 2M!
    refr: "Apple / China Mobile update: Apple iPhone pre-orders over 2 million on China Mobile. See http://bit.ly/1ad4J3R for more @BNN #uscomp $APPL
    5:32 PM - 27 Dec 2013 "Citra Nawbatt @chitranawbatt
    30 Dec 2013, 07:47 PM Reply Like
  • Joshua Chin
    , contributor
    Comments (69) | Send Message
     
    IMO this adds to the fun and dangers of trading apple. Not one analyst or firm has had a consistent track record (not to their fault, AAPL is a complex and secretive company), so analyst reports are literally like tabloids. Full of rumours and gossip! Happy new year!
    30 Dec 2013, 07:48 PM Reply Like
  • richard5832
    , contributor
    Comment (1) | Send Message
     
    This weirdly incoherent story will not die, a good example of a Twitter-amplified $aapl-bashing "patho-meme."

     

    Chitra Nawbatt (@chitranawbatt) of BNN has reported that China Mobile received 1 million pre-orders after 1 day, and over 2 million after several days.

     

    Note also that even before the Dec 22 announcement of the deal, the company had already accumulated over 80,000 pre-orders for Beijing alone, a city that constitutes less than 1.4% of China's population.

     

    The 100,000 estimate is quite curious.

     

    http://bit.ly/1cRRs75
    30 Dec 2013, 08:17 PM Reply Like
  • WisPokerGuy
    , contributor
    Comments (794) | Send Message
     
    Wedge Partners???

     

    whoop-de-freaking-doo !!!

     

    Here I was foolish enough to think we had finally seen the last of this nonsense. Silly me.
    30 Dec 2013, 08:27 PM Reply Like
  • Andrew A
    , contributor
    Comments (131) | Send Message
     
    Mind your own business... and just watch.
    30 Dec 2013, 08:35 PM Reply Like
  • cshoxie
    , contributor
    Comments (265) | Send Message
     
    Just the ammo the naysayers need.
    30 Dec 2013, 08:48 PM Reply Like
  • donzoamania
    , contributor
    Comments (176) | Send Message
     
    Yeah. Keep dropping the price so my dividend will buy more!!!
    30 Dec 2013, 08:54 PM Reply Like
  • bahram2
    , contributor
    Comments (53) | Send Message
     
    The guy who wrote this stupid report, does not know the difference between pre-registration and
    pre-order. China Mobile has not announced yet its price/subsidy.
    30 Dec 2013, 10:19 PM Reply Like
  • bahram2
    , contributor
    Comments (53) | Send Message
     
    This was an attempt to bring down the share price to load before blow out results.
    30 Dec 2013, 10:22 PM Reply Like
  • jbc123
    , contributor
    Comments (48) | Send Message
     
    Let's see, Carl Icahn or Wedge Partners? I think I'll take the cash thanks. Staying long, I like money. Anyone who trades on "information" like this deserves to get wiped out.
    30 Dec 2013, 10:54 PM Reply Like
  • donnie15
    , contributor
    Comments (16) | Send Message
     
    I agree with all the comments. Low volume. Articles here and on Seeking Alpha with bearish viewpoints. Do you really think Apple spent all these years negotiating with CM unaware of the market. These guys are amateurs looking for some press.
    30 Dec 2013, 10:54 PM Reply Like
  • rubber duck
    , contributor
    Comments (193) | Send Message
     
    Another one of those elbow nudge wink "contact" pieces. Once again, my contacts say your contacts don't know what they're talking about. My contacts were also accurate about IPhone opening weekend estimates, beating out many other "contacts".
    31 Dec 2013, 12:18 AM Reply Like
  • ninderad
    , contributor
    Comments (36) | Send Message
     
    Quote: "After tracking sales at Chinese e-commerce sites and regional Apple (AAPL) distributors, as well as talking with Chinese contacts, Wedge Partners' Jun Zhang believes China Mobile took ~100K iPhone 5S pre-registrations over the first two days of availability, and that China Mobile pre-registrations from "open channels" such as e-commerce sites and Apple's stores totaled ~150K".
    Mr Jun Zhang used several time the word "believes"; is this fact finding or just "feeling".
    This in contradiction with the finding of Chitra Nawbatt below?

     

    Latest news China Mobile preorders iPhone 5s (25-27 dec 2013, delivering 17 jan 2013): exceeding 2M!
    refr: "Apple / China Mobile update: Apple iPhone pre-orders over 2 million on China Mobile. See http://bit.ly/1ad4J3R for more @BNN #uscomp $APPL
    5:32 PM - 27 Dec 2013 "Citra Nawbatt @chitranawbatt
    31 Dec 2013, 02:21 AM Reply Like
  • ninderad
    , contributor
    Comments (36) | Send Message
     
    Quote: "After tracking sales at Chinese e-commerce sites and regional Apple (AAPL) distributors, as well as talking with Chinese contacts, Wedge Partners' Jun Zhang believes China Mobile took ~100K iPhone 5S pre-registrations over the first two days of availability, and that China Mobile pre-registrations from "open channels" such as e-commerce sites and Apple's stores totaled ~150K".
    Mr Jun Zhang used several time the word "believes"; is this fact finding or just "feeling".
    This in contradiction with the finding of Chitra Nawbatt below?

     

    Latest news China Mobile preorders iPhone 5s (25-27 dec 2013, delivering 17 jan 2014): exceeding 2M!
    refr: "Apple / China Mobile update: Apple iPhone pre-orders over 2 million on China Mobile. See http://bit.ly/1ad4J3R for more @BNN #uscomp $APPL
    5:32 PM - 27 Dec 2013 "Citra Nawbatt @chitranawbatt
    31 Dec 2013, 02:25 AM Reply Like
  • JG2000
    , contributor
    Comments (403) | Send Message
     
    The rubber will really meet the road when CHL announces it's iPhone subsidy/pricing. Meanwhile, though, I would say that anyone not presuming an impactful CHL upside to AAPL would carry an umbrella hiking the Sahara desert.
    31 Dec 2013, 04:08 AM Reply Like
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