China Mobile added ~1M iPhone users in February

The disclosure comes from China Mobile (CHL -2.6%) CEO Li Yue following the carrier's Q4 report. Chairman Xi Gouhua says China Mobile added 1.34M 4G subs in February, and that "most of them" were iPhone (AAPL -0.3%) users.

Piper's Gene Munster calls the iPhone number "a disappointment," but remains optimistic about the long-term opportunity. Credit Suisse says the number is in-line with its views, and chalks it up to high prices and 4G network quality issues. Cantor's Brian White is counting on the arrival of bigger iPhones later this year to boost China Mobile sales.

China Mobile began selling the iPhone on Jan. 17, after commencing pre-registrations on Christmas. 1.2M pre-registrations had been tallied by Jan. 15. Street estimates for the carrier's 2014 iPhone sales have ranged from 10M to 20M+.

China Mobile's had 776M mobile subs as of Feb. 28. But a large portion of them can't afford the $700+ prices attached to unsubsidized Chinese iPhone 5S/5C sales. 2013 ARPU was only RMB67 ($10.75).

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Comments (22)
  • Cha-Charlie
    , contributor
    Comments (83) | Send Message
    Regarding "2013 ARPU was only RMB67 ($10.75)", it is inaccurate. In Beijing, 2 options one is pre-paid another is post paid. pre-paid RMB50 for half year.after that all the remaining forfeited, this means every year at least RMB. post paid, every month RMB50 charged to account regardless you use your phone or not. If you use your phone, charges apply based on the type of call. In other places, it is may be cheaper, but i don't think will be big difference.


    In addition, in the big metropolitan area, east and inland, the ARU is substantially high than western of China.
    20 Mar 2014, 02:20 PM Reply Like
  • User7766461
    , contributor
    Comments (158) | Send Message
    If "most" of the new 4G subs were iphone users, that implies a minimum of ~700K iphone adds to the 4G network.


    The company also reportedly added 10M 3G subscribers in February (according to apple insider). A total iphone user addition of 1M implies only 300K 3G additions. This implies the penetration of iphone adds of the 3G subscribers was only 3%. This seems very low.


    It was reported that at the end of January China Mobile had 206M 3G subscribers, and at the end of last year it was estimated that roughly 40M CHL 3G subscribers had "grey Market" iphones. This could lead one to expect a penetration of closer to 20%, or 2M of those 10M 3G sub adds.


    I think something was lost in translation here. Obviously the initial roll-out was limited in the number of cities included, and iphone volumes are likely to be much heavier as the roll-out proceeds, but this 1M figure still seems quite low.


    Anyone else have any thoughts?
    20 Mar 2014, 02:25 PM Reply Like
  • synchrogeddon
    , contributor
    Comments (392) | Send Message
    I think no one has a clue, even those reporting :)
    20 Mar 2014, 03:01 PM Reply Like
  • Good Earth CPA
    , contributor
    Comments (6) | Send Message
    CHL plans to sell one hundred million 4G capable devices in 2014, not one million, this is what I heard from Chinese news.


    Good Earth CPA
    23 Mar 2014, 04:03 AM Reply Like
  • Taiko
    , contributor
    Comments (12) | Send Message
    I think something was lost in translation here. Obviously the initial roll-out was limited in the number of cities included, and iphone volumes are likely to be much heavier as the roll-out proceeds, but this 1M figure still seems quite low. It should be strong sell.
    20 Mar 2014, 03:01 PM Reply Like
  • samuel_liu
    , contributor
    Comments (2753) | Send Message
    There are 2 other mobile telecoms with or soon LTE, and who wants to pay for the relatively-nonessential connection subscription prices as well as the IPhone 5s costing over $140 less in Hong Kong.
    20 Mar 2014, 03:32 PM Reply Like
  • portatopia
    , contributor
    Comments (1541) | Send Message
    Not everyday can just go to HK and buy an iphone.
    20 Mar 2014, 08:16 PM Reply Like
  • ConfusedJim
    , contributor
    Comments (55) | Send Message
    Don't forget that February had only 28 business days!
    20 Mar 2014, 03:12 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (13623) | Send Message
    Unless iPhone gets a bigger screen they will go nowhere in Asia. iPhones are already old news even in the US where they are loved for the same reason Nokia dominated the phone industry so long, because current users don't want to learn a new system. Whereas, that keeps an installed base it also tends to doom your company from advancing and adapting to new trends.


    This doomed Motorola, Nokia, Palm, and Blackberry. The fact Apple is so resistant even to bigger screens shows a distinct lack of market awareness and intolerable cheapness to keep margins on Apple's part.
    20 Mar 2014, 08:49 PM Reply Like
  • samuel_liu
    , contributor
    Comments (2753) | Send Message
    I saw a guy with a screen smaller than my 3.5"Itouch, he seemed to be not having any trouble manipulating the HTC screen.
    20 Mar 2014, 11:40 PM Reply Like
  • apple_investor
    , contributor
    Comments (373) | Send Message
    The China Mobile statement implies ~ 1 million of the 1.34 million 4G adds were new iPhones. Notably absent were any indications of any 3G new iPhone users. Since we know there were 10 million 3G adds, logically some should be new iPhones, especially because 4G has very limited availability right now.
    20 Mar 2014, 03:24 PM Reply Like
  • samuel_liu
    , contributor
    Comments (2753) | Send Message
    Apple IPhone does not connect to Cn Mobile's 3g.
    20 Mar 2014, 03:35 PM Reply Like
  • David RG
    , contributor
    Comments (2964) | Send Message
    Interesting Sam. Why not? The Qcom baseband they use works on TD-SCDMA.
    20 Mar 2014, 03:59 PM Reply Like
  • apple_investor
    , contributor
    Comments (373) | Send Message
    Old iPhones don't connect to 3G on CM, all the new ones being sold now do. A major reason I believe new iPhones are being sold to CM users who don't have 4G in their service area.
    21 Mar 2014, 10:15 AM Reply Like
  • imvho
    , contributor
    Comments (412) | Send Message
    4G is the newest, fastest, and best mobile service in China. It's also the most expensive.


    China Mobile is just beginning the ramp-up of its 4G service.


    They expect to have 50 million new 4G users by the end of 2014.


    If most of these are iPhone sales, then all previous estimates are way too low.


    It's a tsunami!
    20 Mar 2014, 04:09 PM Reply Like
  • Kuro1
    , contributor
    Comments (45) | Send Message
    So, February China Mobile sales added an incremental $700,000,000 in gross sales? Doesn't sound that bad. Wonder how many units were allocated / available / are on order?
    20 Mar 2014, 04:41 PM Reply Like
  • 2puttwo
    , contributor
    Comments (660) | Send Message
    This is really great news. Since 4G is just getting started, and Apple already leads the market by a whopping margin, this fact could be very important a couple years from now. I guess Apple is still the leader by far in 4G not only in China, but in every 4G market, especially Japan and the good old USA. WTG Apple. Time to buy.
    20 Mar 2014, 04:42 PM Reply Like
  • ultraz2
    , contributor
    Comments (1107) | Send Message
    Apple needs to continue buying stock back,until the shares on the market reach 750 million. And or look at larger M&A. Once a company buys back stock ,it can always re issue if needed to pay for an M&A. Buying back stock is like having a savings account. And not having to pay dividends is the interest.
    20 Mar 2014, 05:44 PM Reply Like
  • 359077
    , contributor
    Comments (6) | Send Message
    And it would negate some of the shares that will come back to the float when employees exercise their stock option grants.


    Likely they will be able to buy back their shares for significantly lower prices after April earnings which means they would be able to buy back more shares with the same amount of money.
    21 Mar 2014, 12:59 AM Reply Like
  • 359077
    , contributor
    Comments (6) | Send Message
    If the buildout has far to go, then buy the fiber optic companies that are providing the hardware.


    Apple is a second half story. Buy it after the gap down in April.
    21 Mar 2014, 12:33 AM Reply Like
  • EquityInvestor1
    , contributor
    Comments (87) | Send Message
    Anyone else baffled by CHL almost $100B quarterly revenue and $20B net profit (20%!) even after increasing their buildout expenditure, yet it's share price falls! No wonder retail investor doesn't trust anything about this market.
    21 Mar 2014, 12:45 AM Reply Like
  • SP5524
    , contributor
    Comments (86) | Send Message
    Gene Munsters research, false predictions of a TV for years, and a 1000 price target has been "disappointing".
    21 Mar 2014, 04:34 PM Reply Like
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