Apple gets access to a huge smartphone market

The company inks a deal to begin selling its phones on the largest network in China. Does this make Apple a buy?

By Motley Fool Investor Beat Dec 23, 2013 3:03PM
Shares of Apple (AAPL) were up Monday on the news that it has finalized a deal with China Mobile (CHL).

The deal means that China Mobile, China's largest phone network, will begin supporting the iPhone 5s and 5c. According to Motley Fool One Analyst Jason Moser, this opens Apple up to China Mobile’s approximately 700 million subscribers -- however, because the GDP of China is somewhere around $10,000 per person, Chinese consumers will be much more sensitive to the high price of Apple phones than American consumers are.
Meanwhile, Apple enjoyed the benefits of being the sole proprietor of Beyonce's new album a few weeks ago, leaving retailers like Target and Amazon out in the cold.

Jason thinks that exclusivity will become more commonplace with music as it has with movies, but that doesn't mean that Apple will dominate it -- bricks and mortar retailers, as well as Amazon, will continue to pose a threat.

So with all that said, is Jason buying Apple today? He says no, but that doesn't mean that Apple isn't a great company that investors should keep an eye on.

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Tags: AAPLCHL
4Comments
Dec 24, 2013 10:07AM
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This article points out the fallacy of present market prices.  As the arbitrage of wages continues and worker wages in the US decline to those of the Asian rim profit margins will shrink and stocks will become massively overpriced.
Dec 24, 2013 4:49PM
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Apple, AT&T and Verizon set the subsidies for iToys in the US but what if China tells its carriers that all device subsidies will be standard regardless of brand or device. A $600 device should cost $120 upfront and $20 month for 24 months or $600 upfront. The service plan should be separated from the imbedded device plan like T-Mobile is now doing. That will be a real eye opener for consumers and cut way into the 2 year refresh cycle.
Dec 24, 2013 12:23PM
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Access does not translate directly into sales!
Dec 23, 2013 5:08PM
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That's good news for Apple, for now.  But how about later, when the Chinese clone Apple's new phone. and sell it for a third of current retail price.
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