iPhone sales in China: All across the news, you can find IDC’s (a research firm) projections for Apple Inc. (NASDAQ:AAPL) in China. IDC’s analysts believe that the company´s smartphone market share could double in the country from this year to the next one. Although the iPhone 5C, Apple´s “low cost” model, is still expensive for the Chinese market, many expect a deal with China Mobile Ltd. (ADR) (NYSE:CHL), the world’s largest mobile carrier with more that 750 million subscribers, to be landed soon, hoping it to drive iPhone sales.
Credit Photo: Apple
At the time, only China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU) and China Telecom Corporation Limited (ADR) (NYSE:CHA) offer iPhones in the country. Nevertheless, their impact on global iPhone 5S and 5C sales cannot be disregarded. Although Apple refused to provide details, analysts believe that an important percentage of the 9 million devices sold on the first weekend at the market come from China.
China is already the largest smartphone market in the world, and IDC anticipates that it will keep on growing, to reach 450 million devices shipped in 2014, up 25% from 360 million in 2013. Apart from the expected deal between Apple and China Mobile, this projection is mainly based on the Government´s licenses for 4G networks.
However, Apple is sixth in terms of market share (5%) in China, trailing Samsung Electronics Co., Ltd. (KRX:005930) and Lenovo Group Limited (ADR) (OTCMKTS:LNVGY), amongst other local brands. According to IDC, even if the deal with China Mobile goes through, Apple will continue to be a laggard to smartphones running Google Inc (NASDAQ:GOOG)´s Android operating system, which are substantially cheaper.
The research firm expects the market share to become more fragmented, and Apple’s and Microsoft Corporation (NASDAQ:MSFT)’s Windows Phones to increase their adoption rates. A deal with China Mobile would certainly boost iPhone sales. Actually, holding 158.7 million 3G subscribers (21% of its total installed base) by the end of August, the opportunity for Apple is huge.
Although one would expect these projections to boost Apple´s stock price, the rise is almost insignificant (or null). After they surged due to estimates beating iPhone sales, shares are now quite flat. Betting on a possible deal is evidently not as safe as betting on record sales, and Apple´s stock is living proof of it. Check back here for more updates on iPhone sales in China.
Disclosure: Javier Hasse holds no position in any stocks mentioned