John Paczkowski

Recent Posts by John Paczkowski

How Many iPhones Can Apple Sell on China Mobile? (Spoiler: Lots)

Great-Wall-of-iPhones-380x285-featureIt has taken more than five years, but Apple has finally inked its long-anticipated iPhone distribution deal with China Mobile, and in doing so, has seized an opportunity for big smartphone market-share gains.

With more than 700 million subscribers, China Mobile is the largest wireless carrier in the world, and one of the few that can significantly move the needle on iPhone sales.

But by how much?

The first estimates began rolling in last night, and they’re sizable. Piper Jaffray analyst Gene Munster figures that Apple could sell 17 million total iPhones on China mobile in 2014. That’s about 10 percent of the carrier’s 3G subscriber base, and two percent of its total subscribers, which seems a reasonable estimate.

Remember that China’s lower incomes and the high unsubsidized price of the iPhone will likely temper demand for the device. As Munster notes, the average unsubsidized cost of a smartphone on China Mobile is about $270 — significantly lower that the $718 and $846 unsubsidized prices of the iPhone 5c and 5s.

Munster’s forecast is conservative compared to some others. ISI analyst Brian Marshall, for example, is looking for more than double that 17-million-unit figure. He’s calling for iPhone sales on China Mobile of 38.7 million for calendar 2014, with seven million sold in Q1, 8.7 million in Q2, 10.5 million in Q3, and 12.5 million in Q4.

CHL_iPhone

And over at Cantor Fitzgerald, analyst Brian White is forecasting calendar 2014 iPhone sales of 20 million to 24 million on China Mobile.

Big numbers, all of them, the magnitude of the final number to be driven by marketing as much as demand, as Wedge Partners analyst Brian Blair — who is figuring on sales of 18 million to 20 million — observes.

“We expect a strong marketing push to follow the official announcement, and that is what is critical,” he told AllThingsD. “It’s Apple’s job to turn the Chinese consumer away from entrenched brands like Samsung.”


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