How Big Is Apple’s China Mobile iPhone Opportunity?
With 280 carrier partners across more than 100 countries, Apple’s addressable market for the iPhone these days has been estimated by some to encompass upward of four billion subscribers. With a reach that broad, opportunities for big market share gains aren’t as easy to come by as they once were — which is why we may soon see that long-in-the-offing deal to bring the iPhone to China Mobile.
With more than 700 million subscribers, China Mobile is the largest wireless carrier in the world, and, as ISI analyst Brian Marshall notes, it’s one of the few remaining carriers that can really move the needle on iPhone sales. Approximately 180 million China Mobile customers use the company’s 3G network, and Marshall figures that’s a good proxy for gauging the size of the iPhone opportunity it presents for Apple. And that opportunity is massive. Said Marshall, “In our view, this potential subscriber base could eventually be almost as large (in unit terms) as the opportunity from AT&T and Verizon in the U.S. combined.”
If Apple were to ink a deal with China Mobile in the near future, Marshall figures the company could easily sell an additional five million iPhones in the December quarter, based on three percent penetration of that 3G subscriber base of 180 million.
And as penetration increased quarter to quarter, iPhone sales would rise accordingly, so that by the time the fourth quarter of 2014 rolls around, Marshall thinks China Mobile could be notching iPhone sales of 12.5 million units. Taken together with that year’s other three quarters, Marshall predicts that China Mobile could spike Apple’s iPhone sales by 38.7 million units in calendar 2014. Here’s Marshall again: “By the end of CY14, we believe the iPhone at China Mobile could ramp to ~5 percent quarterly penetration (e.g., similar levels as U.S. carriers) and drive unit volume nearly equal to AT&T and Verizon combined.”
An encouraging forecast, though a fantastical one for now. At this time, it’s not at all clear that Apple has inked an iPhone deal with China Mobile. Indeed, China Mobile Chairman Xi Guohua said last month that the two companies were still in a “deliberation process” about such an agreement. Still, it’s clear that both sides are very much interested in hammering one out, particularly Apple, whose revenue from Greater China slipped 14 percent year over year in the third quarter.