Symbol Lookup
Register | Login

Pre Market | Dow Jones | Gold | Newsletters | Learn

The Apple - China Mobile Deal By The Numbers

Wednesday, December 4, 2013 9:17 AM

The Apple (NASDAQ:AAPL) rumor mill has China Mobile (NYSE:CHL) on the brain right now and based on the advertisements that were leaked, it appears that China Mobile customers will have access to the iPhone very soon.

The launch date is rumored to be December 18—the date the company is set to activate its 4G LTE network.

Assuming the leaks are true, investors want to know how the numbers work out for Apple. Amit Daryanani of RBC Capital Markets did some number crunching to come up with the answer.

China Mobile currently has about 755 million subscribers. Of those, 170 million are currently high-speed data customers. In comparison, China Unicom and China Telecom, the next two largest carriers in the country have 454 million subscribers combined.

Comparing to U.S. carriers, Verizon has 119 million subscribers while AT&T has 107 million. If Apple can sell 17 million iPhones to China Mobile customers, that could produce $9 billion to $10 billion in annual revenue or $3 per share. That’s assuming an average purchase price of $560 and margins of about 30 percent.

Daryanani thinks that a China Mobile deal could increase Apple’s China market share by up to 1.8 times and that the number of customers taking advantage of data features on smartphones is rising rapidly—about 16 percent in the September quarter alone.

Related: iPhone Pre-Orders May Finally, Quietly Begin Taking Hold with China Mobile

Despite a Dow that was down nearly 100 points and an S&P that was down about five points, Apple ended the day 2.7 percent higher reaching a 2013 high of $566.32. That represents a gain of 44 percent since its $393 low in June. As people try to figure out why the stock continues to move higher, many are speculating that the China Mobile deal is being priced in.

But don’t forget that while the China Mobile deal is looking promising, it’s still a rumor. When asked, China Mobile would only say that it has nothing to announce at this time. The deal could be non-existent, the December 18 date could be inaccurate, or there could be some other aspect of it that makes it far less exciting than investors expect. If you’re putting money to work on the back of a rumor, be careful.

Disclosure: At the time of this writing, Tim Parker was a long-term holder of Apple.

(c) 2013 Benzinga does not provide investment advice. All rights reserved.


FREE Options Trading Lessons
I'll show you how to unlock HUGE Gains with Options Trading
Let's make 2014 the year you get RICH!
Apple Off The Hook In Antitrust iPod LawsuitApple Off The Hook In Antitrust iPod Lawsuit
The decade-long antitrust lawsuit against Apple Inc. (NASDAQ: AAPL ) finally saw its closure Tuesday when a jury concluded that Apple didn’t violate any antitrust laws and gave its verdict in the...
Stay Away From Apple: Worst Call Made By Big Money Managers In 2014Stay Away From Apple: Worst Call Made By Big Money Managers In 2014
One of the star performers among large caps and among technology stocks this year,  Apple Inc. (NASDAQ: AAPL ), was predicted as a stock to stay away from by most big money managers in the beginning...
Why Frank Zorrilla Won't Trade Apple Like A Momentum StockWhy Frank Zorrilla Won't Trade Apple Like A Momentum Stock
Frank Zorrilla says he trades everything. He’s the founder and chief investment officer of Zor Capital, and he recently joined Benzinga’s #PreMarket Prep to talk about why he won’t trade Apple In...
Can Apple's Siri Cause You To Wreck Your Car?Can Apple's Siri Cause You To Wreck Your Car?
More than 65,000 people were killed in car crashes over the past two years. According to data analyzed by Erie Insurance, one out of every 10 crashes involved a distracted driver. Top Distractio...
Exploring Apple's Recent DowntrendExploring Apple's Recent Downtrend
Apple Inc. (NASDAQ: AAPL ) has been on a downtrend since the beginning of December. After rising throughout the year without any major slumps, the stock hit a $119.75 high on November 25 and since t...
IDC Reports On Western European Smart Connected Device MarketIDC Reports On Western European Smart Connected Device Market
International Data Corporation (IDC) published third quarter metrics Tuesday for the Western European smart connected device (SCD) market. The report noted that “PC, tablet, and smartphone shipments...
Apple & GoPro: Here's What Will Keep The Bulls GoingApple & GoPro: Here's What Will Keep The Bulls Going
GoPro Inc (NASDAQ: GPRO ) and  Apple Inc. (NASDAQ: AAPL ) are two different companies, making different products. However, these stocks exhibit a lot of similarities. Both stocks had a wonderful...

Loading Headlines...

Stock Market

Track the stock market today with the latest news and information on all things investing! Watch your stocks perform throughout the day and watch the breaking stock market news.

Feedback | disclaimer | privacy policy

Stock Market News

The Stock Market is ever changing. Keep up on your stock market news.

Stock Market Newsletters

Read up on your favorite stock market newsletters.

Learn the Stock Market

Sharper your stock trading skills with our stock market education section.

Algorithm Based
Trade Signals
small cap swing trades SmallCaps stocks under $10
Index Signals Index Signals SPY, QQQ, DIA, IWM
options trading Mega Stocks options + stock trade signals
Forex Forex Signals major FX pairs signals