Apple’s (AAPL) iPhone 5 Coming to China Earlier Than Expected: Report

By Nov 10, 2012, 12:01 PM Author's Blog  

Two of China’s leading mobile carriers are preparing to introduce Apple (AAPL)’s iPhone 5 in late November or early December, marking the official entry of the tech giant’s latest smartphone into China, reports The Wall Street Journal.

In remarks made Friday on the sidelines of the Chinese Communist Party’s 18th Party Congress in Beijing, China Telecom (CHA)’s Chairman Wang Xiaochu told the Journal that the iPhone 5 should be available by early December if not sooner.

China Unicom (CHU)’s Chang Xiaobin, aware that his company was waiting for the government to grant the remaining licenses for the phone to be released in China, was more cautious. “We hope to offer it this year,” he told the Journal. “But what I say doesn’t matter.”

Mr. Chang also said that he expects Chinese demand for smartphones to continue to grow next year.

Meanwhile, China Mobile (CHL), the world’s largest mobile operator with 699 million subscribers and Apple’s ultimate prize in the country, is expected to start selling iPhones in early fiscal 2013. That said, for now Apple has no agreement with the carrier.

In a note to clients on the impact of an eventual deal with China’s Mobile, RBC Capital’s Amit Daryanani said China Mobile could sell 10 million to 16 million iPhones in the first 12 months. He calls China Mobile the “800-pound gorilla” of China’s wireless industry, with 65% market share. By comparison, China Unicom has 21% market share and China Telecom 14%.

“Assuming a 13% iPhone penetration rate with 3G customers,” Daryanani writes, “we estimate that the addition of China Mobile would add ~$3 to Apple’s annual EPS or $45 to its stock price. ”

Needless to say, China is a very important market to Apple. During Apple’s October conference call, CEO Tim Cook told analysts that China made up about 16% of Apple’s business during the 2012 fiscal year. In Apple’s fiscal 4th quarter ended Sept. 29, China sales rose 26%, totaling $5.7 billion. Cook also said during his cc that the iPhone 5, which debuted in late September and is now available in 32 countries, would arrive in China before the end of this year.

A late November or early December launch in the world’s largest mobile phone market not only would give Apple a great opportunity to elevate its presence in China, but could also have a significant effect on the company’s bottom line.

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