Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Apple Inc. (AAPL) On The Verge Of Major China Mobile Ltd. (ADR) (CHL) Deal


Quoting people familiar with the matter, The Wall Street Journal last Friday reported that Apple Inc. (NASDAQ:AAPL) is preparing to ship iPhones to China Mobile Ltd. (ADR) (NYSE:CHL). After years of negotiations, a deal with the world’s largest wireless carrier is excellent news for Apple Inc. (NASDAQ:AAPL) shareholders.

Just how big is China Mobile Ltd. (ADR) (NYSE:CHL)? Seven hundred forty-five million wireless subscribers, more than twice the population of the U.S., seven times Verizon Wireless’ subscribers, and 17 times T-Mobile’s subscribers.

Apple Inc. (NASDAQ:AAPL)

The long-awaited deal
It’s been about seven years since Apple Inc. (NASDAQ:AAPL) launched the first iPhone and the world’s largest carrier still lacks iProducts. For years, speculation of a deal has been just that: speculation, and no more.

Apple Inc. (NASDAQ:AAPL) already has deals with China Telecom and China Unicom to sell the iPhone. Though these carriers boast some impressive numbers, together they are still just half the size of China Mobile Ltd. (ADR) (NYSE:CHL).

Last Tuesday, when Apple announced it is hosting a satellite Apple event in Beijing on Wednesday September 11, there was wide speculation that a deal between China Mobile Ltd. (ADR) (NYSE:CHL) and Apple may be announced at the event. Now, given the Journal‘s report and a similar one from Bloomberg on the same day, it looks like the deal is finally here. Though it’s still uncertain whether the deal will be announced at the Beijing event, we do know that it will not be announced at Apple Inc. (NASDAQ:AAPL)’s media event tomorrow, according to Bloomberg.

The takeaway for investors
For the last eight months that China Mobile Ltd. (ADR) (NYSE:CHL) has posted subscriber numbers (up until July), its sequential growth rates in 3G subscribers have outpaced its peers. Even more, only 20% of China Mobile’s 745 million wireless subscribers are 3G subscribers, compared to 39% and 51% for China Unicom and China Telecom, respectively. This means that not only is China Mobile’s 3G base growing faster than its peers’, but it has more room to grow — together, these two facets of China Mobile’s subscriber base provide significant opportunity for Apple.

Rendering of Apple’s rumored lower-cost iPhone. Source: MacRumors.

Morgan Stanley’s Katy Huberty, after crunching some numbers, concluded that a cheaper iPhone combined with a China Mobile deal could triple Apple’s addressable smartphone market in the country. China Mobile Ltd. (ADR) (NYSE:CHL) is undoubtedly a catalyst for Apple’s iPhone segment. I’ve detailed the opportunity here, here, and here.

With iPhones accounting for more than half of Apple Inc. (NASDAQ:AAPL)’s revenue, China Mobile could help Cupertino’s tech king to finally move the needle in the right direction on its bottom line.

The article Apple Preps iPhones to Deliver to China Mobile originally appeared on and is written by Daniel Sparks.

Fool contributor Daniel Sparks owns shares of Apple. The Motley Fool recommends and owns shares of Apple. It also owns shares of China Mobile.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!