Apple Deal with China Mobile Finally Done
After long anticipation, tremendous speculation, endless rumor and the shuttle diplomacy of CEO Tim Cook himself, Apple and China Mobile have finally done the deal. The multiyear deal announced this weekend is huge for Apple in that the company’s iPhone products will have the opportunity to tap a huge market. It opens up a market in excess of 760 million China Mobile subscribers. As the Wall Street Journal pointed out in its coverage that is seven times as many subscribers as that of Verizon Wireless. Apple iPhones will be able to operate on both China Mobile’s brand new 4G network and its existing 3G network.
Added distribution and fulfillment needs include that phones will be available via China Mobile’s nationwide retail network as well as Apple stores located across that country. Availability begins on January 17th.
It will further afford Apple to opportunity to compete with existing in-trenched market players within China which include Lenovo, Huawei, Samsung and Yulong. It is a market where smartphones priced under $100 are plentiful while the Apple iPhone 5c retails unsubsidized for $739 and the iPhone 5s for $871. Because of this situation, many speculated that the new iPhone 5c model would be more competitively priced.
Obviously brand identity, will be an important determinant in the months to come.
Equity and markets differ on the added volume potential for Apple brought about by the China Mobile deal. Added volume from the China Mobile deal range from 10 million to as much as 24 million phones sold in 2014.
Apple has received a huge Christmas present- its coveted presence as an offering among one of China’s largest mobile networks. The coming months will be the new test in how the Apple supply chain responds to greater exposure to China’s dynamic and price competitive smartphone and complex channels market.