Apple set to sell iPads, iPhone 5 in China
This could be the catalyst to get shares moving sharply higher, as China is one of the tech giant's fastest-growing markets.
One of the largest bull cases on Apple (AAPL) is the growing popularity of its devices in China. That wave may be about to be unleashed, as the iPhone 5 is going East.
Apple confirmed Friday morning that the Wi-Fi versions of its iPad Mini and fourth-generation iPad will be coming to China on Dec. 7. The iPhone 5 will be available one week later, Dec. 14. It's expected that the iPhone 5 will come to China Telecom (CHA) and China Unicom (CHU).
Now that Apple is able to get the iPhone 5, which has healthy demand in the United States, in the hands of Chinese citizens in time for the holiday shopping season, Wall Street's prevailing estimates for iPhone sales could be conservative.
Analysts have had a difficult time figuring out foreign iPhone sales, as the numbers are not reported with the regularity you'd get from such domestic carriers as AT&T (T), Verizon Communications (VZ) and Sprint (S). Piper Jaffray analyst Gene Munster said he believes Apple will sell 45 million units this quarter, but that was based on checks with Apple Stores in the United States. Apple has only seven stores in China and Hong Kong.
Apple has been working on iPhone 5 availability, and ramping up production, as components become more readily available. Apple's website has shown an improvement in iPhone 5 ship dates, as back orders have improved. They've moved from three to four weeks to two to three weeks, now down to one week.
Supply and demand are starting to balance, which is inherently a good thing for Apple, as CEO Tim Cook noted in the company's fiscal-fourth-quarter conference call. "The demand for iPhone is extremely robust. We are thrilled with what we see," Cook told analysts and shareholders.
Cook went on to note that revenue from China rose 26% in the quarter to $5.7 billion. The iPhone 5 had not officially been granted network access yet, and with deals with Chinese wireless providers on the way, it's widely expected this number will be much higher in the coming months.
Signing a deal with China Mobile (CHL) -- the world's largest mobile carrier -- will be key for Apple. China Mobile had more than 700 million subscribers at the end of October. Of those, 79.3 million are 3G subscribers. China Mobile is working on building out its own 4G network, which many presume to be the final stage of an Apple-China Mobile deal. If Apple were to capture even 20% of those 79.3 million, that's good for another 15 million iPhones.
The network access for the iPhone 5 is a huge coup for Apple, one that will help turn the tide against Samsung, ZTE and other device makers that are firmly entrenched in China.
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