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Apple (AAPL) Signs Deal With China Mobile

Apple (AAPL) Signs Deal With China Mobile


Apple (AAPL) Signs Deal With China Mobile

Apple Signs Deal With China MobileApple Inc. (NASDAQ:AAPL) has finally announced a deal with China Mobile. The company will begin to offer the iPhone on the world’s largest network on December 25, and the device will become available to the carriers customers on January. 17. The deal is the last real event in Apple’s 2013, though it has been coming for a long time.

The iPhone didn’t work properly on China Mobile. Since Apple Inc. (NASDAQ:AAPL) decided to adopt one 3g technology and the carrier took another the two have been incompatible. With the release of this year’s iPhones and the launch a 4g network across China that obstacle no longer stands. The deal is good for Apple, but the company still faces problems in Asia.

Apple China Mobile Deal

Neither Apple Inc. (NASDAQ:AAPL) nor China Mobile were all that effusive about the details of the new agreement. It is unclear what the iPhone will cost on China Mobile, and the subsidy that the company will be playing is equally mysterious. The carrier’s purchasing power, and the problems that Apple is having in China, may have weighed on the final terms the two companies agreed.

The first iPhones sold by China Mobile will be available in January, and they are sure to bring a wave of hype along with them. Analysts are expecting the carrier to sell as many as 17 million Apple smartphones next year, and the company is likely to be given a temporary reprieve from slowing iPhone sales by virtue of the additional subscribers.

Shares in Apple Inc. (NASDAQ:AAPL) rose appreciable before the market opened on Monday morning in response to the announcement. Despite the fact that most of the impact of the China Mobile deal is already priced into the company’s shares, investors are optimistic about Apple’s medium term as a result of the announcement.

China is the company’s second biggest market, and the addition of China Mobile will boost its size considerably. Apple Inc. (NASDAQ:AAPL) will rely on the country’s growing economy more and more in the years ahead as the developed world becomes saturated with premium smart phones and the devices become commoditized.

Apple battles Samsung for China

South Korean firm Samsung is leading the charge to commoditize smart phones, and its greatest success has probably been in China. The firm is way ahead of Cupertino in the country because of the range of devices it offers, and its ability to approach China Mobile customers. Apple Inc. (NASDAQ:AAPL) is fighting a losing battle as it tries to keep the smart phone valuable.

The China Mobile deal will offer a short lived boost to Apple Inc. (NASDAQ:AAPL) revenue, but it won’t solve the big problems that the company is facing. Most of the people that can afford an iPhone and are willing to buy one already have one. Margins are lower on every subsequent generation.

Apple Inc. (NASDAQ:AAPL) is one of the most impressive tech companies of all time, but it needs to prove it has growth planned beyond the smartphone. The China Mobile deal is good, but Apple needs something more to really excite its investors.

About Michael Reed

Michael Reed covers business and finance related news.

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