This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Apple Inc. (AAPL) Estimates Do Not Include China Mobile IPhone Units

Stocks in this article: aapl CHL

China Mobile Ltd. (CHL) HKG:0941 will start selling Apple Inc. (AAPL) iPhones on December 18 th along with the launch of its 4G TD-LTE service, reports Xinhua News Agency, China’s official press agency. Analysts Peter Misek, Jason North and Billy Kim at Jefferies note that those who maintain a sell position on Apple may not have considered the China Mobile effect yet, which will give some tailwind to fiscal 2014 earnings estimates.

Estimates do not include China Mobile iPhone units

Apple Inc. (AAPL) and China Mobile Ltd. (CHL) HKG:0941 have been in talks for a while now, and Apple is reportedly developing a device compatible with China mobile's 4G network, according to the release. It is also mentioned that China mobile will launch 4G TD-LTE service first in Beijing, Guangzhou and Chongqing, eventually followed by Shanghai as it is still working on its 4G network.

The analysts feel that most of the street estimates have not yet included China Mobile iPhone units. "As a result, we believe there is a tailwind to FY14 estimates Jef 172.4M units and $99.1B revs, St $98.4B revs with FQ2 Mar Jef 40.8M units and $24.2B revs, St $24.4B revs seeing some upside due to the TD-LTE launch ahead of Chinese New Year," says the report.

The Apple Inc. (AAPL) and China Mobile negotiations have had to overcome many hurdles, such as incompatibility with China mobile's 3G TD SCDMA and premium pricing of iPhones, owing to which the network carriers have to provide subsidies to make them affordable. The recent launch of baseband chipsets by Qualcomm has solved the technical glitch by making China Mobile's 3G network and also its upcoming 4G TD-LTE network accessible.

Apple should plan inventory carefully

According to some analysts, post-Apple and China Mobile partnership, the iPhone maker would have to keep at least 3 to 4 million handsets aside to meet the initial demand. Also, it may require a few more months for China Mobile Ltd. (CHL) HKG:0941 to install a larger number of base stations to provide better service.

China Mobile has a subscriber base of 750 million compared to China Telecom's 250 million subscribers. However, the subscriber growth rate of China Mobile has been lower than rivals China Unicom and China Telecom. China Mobile posted a growth rate less than 10% year over year for the last 12 months. That said, the 3G growth rate of the network carrier is faster, but at a lower penetration level. Also, China Mobile has a host of handset vendors that it can partner with, including Samsung or Chinese companies such as Xiaomi.

-By Aman Jain

null

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,891.60 +86.80 0.49%
S&P 500 2,071.43 +0.78 0.04%
NASDAQ 4,769.5460 +4.1660 0.09%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs