A long-awaited deal between Apple Inc. and China Mobile Ltd. has been signed. The tie-up concerns the distribution of iPhones on China Mobiles network, and will have literally a push-up effect on the Apples sales on the Chinese market – the worlds largest mobile market.
The arrangement will give Apple access to more than 700 million subscribers. On the other hand, China Mobile is still one of the last major distributors, which does not offer the iPhone. As a matter of fact, the two parts have been negotiating for several years now, but the arrangement were not finalized due to the reluctance of Apple to provide iPhones to the relatively unreliable 3G networks of China Mobile.
A China Mobile conference in Guangzhou is scheduled for December the 18th, which is also the time when the distribution of iPhones will probably start. The conference of the company will be the event at which China Mobiles new brand for the 4G network is expected to be presented. In addition, the executives of the company have also announced that the distribution and selling of iPhone will begin only after their new 4G services are officially presented to the customers. The company and its smaller competitors were also given licenses to operate the higher-speed mobile networks.
Such a deal between China Mobile and Apple will provide the latter with the opportunity to get a subscriber base, which is seven times bigger than the one provided by the largest distributor in the U.S. Of course, Apple was forced to meet serious competition from some lower-cost rivals in order to grab the fantastic growth opportunity, especially in a time when its U.S. revenue growth is considerably smaller.
All this comes here to prove that both parts have chosen the perfect timing for making the deal official. About 1.5 million iPhones per month are expected to be sold by China Mobile, which has the potential to eventually increase Apples unit sales thanks to 20 million additional iPhone activations during the next year.
According to Bloomberg, the current share price of China Mobile Ltd. is 0.53% up, and its one-year return rate is 1.67% down. Apples current share price is 0.23% down, and its one-year return rate is 7.49% up.