Apple Inc. (AAPL) China Success Not Based on China Mobile: Analyst

As we wrote in this space yesterday, there has been much speculation lately that Apple Inc. (NASDAQ:AAPL) has been struggling in China with its iPhone in one of the largest developing markets in the world. There has been much talk that perhaps the lack of a deal with China Mobile to sell the iPhone is part of what has compromised Apple’s market share to where the company fell to sixth place in China market share.

But there is one analyst named “Emerging Money” on NASDAQ’s blog that thinks those who believe China Mobile’s non-deal is the real catalyst don’t know the whole story, and in fact, the analyst broke down the China market for Apple Inc. (NASDAQ:AAPL) and suggests that those on both sides of the market’s animal kingdom – those who are bearish on Apple stock and those bullish, based on China – are likely both wrong.

In their opinion, China Mobile on the main, won’t really move the needle. There are other factors at play here weigh more on Apple Inc. (NASDAQ:AAPL) fortunes in China. The fact that Apple has yet to make a deal with China’s largest mobile network to carry the latest iPhone is not a huge issue, because a deal will eventually get done, and there have been many China Mobile customers who reportedly switched to other companies so they can use their iPhone – albeit with relatively limited Chinese functionality.

In the post, the author cites that a market share drop reported is mainly attributed to the explosive growth of the low-cost phone market, of which Apple Inc. (NASDAQ:AAPL) is not a part. At the high-end segment of the market, Apple is only competing with Samsung Electronics Co. Ltd.

The real issues, then, for Apple appear to come from getting penetration with the iPhone 5, which supposedly has the best Chinese functionality of any of the iPhone models, as well as the growing segment of the population that are younger Chinese who are getting more wealthy and will be able to afford Apple devices.

Samsung has had the lead in Chinese functionality for businessmen in China, and Apple Inc. (NASDAQ:AAPL) will need the iPhone 5 to resonate with this group – China Mobile deal or not. One sticking point for any Apple-China Mobile deal may be China Mobile’s desire to get a piece of the App Store, and while 700 million users is a large number, it’s intriguing to see some diverging opinions on the importance of such a deal.