Apple Inc opens door to China Mobile subscribers, iPhone sales expected to reach 12 mn

Jan 17 2014, 19:30 IST
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Apple Inc CEO Tim Cook with China Mobile Chairman Xi Guohua (3rd R) at an event celebrating the launch of iPhone on China Mobile's network in Beijing. (Reuters) Apple Inc CEO Tim Cook with China Mobile Chairman Xi Guohua (3rd R) at an event celebrating the launch of iPhone on China Mobile's network in Beijing. (Reuters)
SummaryApple is trailing in 5th place with just 6 pc shares in China's smartphone market in Q3 of 2013.

Chinese New Year, when people traditionally exchange gifts of money in red envelopes and retail sales jump.

SALES CANNIBALISATION

After taking years to hammer out a deal with China Mobile, Apple's sales in China should get a short, sharp boost as subscribers make the most of the double-whammy of the iPhone's arrival and the rollout of high-speed 4G mobile networks.

Reservations for iPhones had already hit 1.3 million on Wednesday, according to a China Mobile spokeswoman, although Reuters checks showed that there were multiple registrations using fake ID numbers.

But the rewards are expected to be short-lived for the Cupertino, California-based company, which faces a deeper problem in China of having fallen out of favour with consumers who are increasingly opting for domestic offerings.

Another issue is the thriving grey market for iPhones, where users can buy handsets typically smuggled from Hong Kong and then sign up for a China Mobile contract. China Mobile already has 45 million iPhone users in China, according to a company spokeswoman.

"You need to consider the cannibalisation for sales to China Unicom, China Telecom and the grey market, so even though there's an addition from China Mobile it will also impact sales from other channels as well," said CK Lu, a Taiwan-based analyst with Gartner.

"If we really want to see the expansion of sales we'll have to wait for the next version of the iPhone. If China Mobile gets first launch and their subsidies are attractive people will probably rush to the iPhone that China Mobile can provide."

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