Why Apple Inc attract towards china mobile deal

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Apple deals with china

The leading mobile technology provider Apple Inc announced its long awaited deal with china mobile. This big deal can help to boost iPhone sales in market where Apple Inc faces huge competition. According to the joint statement Apple star product iPhone5c and iPhone5s will be available in china mobile retail network and Apple stores in 17th jan 2014. If we talk about the Smartphone market shares then Apple capture only 12% market shares which is well below Samsung 20%. With this deal Apple capture huge market share in the second largest economy.

Mobile market Analyst suggests that 12 million additional iPhone could be sold after 17th jan 2014, while other analyst says that it could be 10 billion. But, question arises how  apple could take actual advantage after this deal?

The financial report of this long awaited deal has not released yet but the partnership will provide excellent way to capture huge mobile market. According to the market researcher report the size of china mobile market is three times bigger than US mobile market.

The official website of china mobile already offers pre registration form of Apple star product iPhone5s and iPhone5c and will be available for sold from 17th jan 2014. This deal also makes a big improvement for iphone users who are rely on 2G networks. Now the iPhone will able to work with 3G china mobile network and 4G TD-LTE network which are good example of high speed mobile broadband access. Users of iPhone will able to use these networks in 16 Chinese cities.

Effect of china mobile network

The Apple report in 2013 says that china mobile generates $25.47 billion annual revenue; this figure could radically change after iPhones arrives in china mobile network. According to the other analyst report after the deal may be 12 million iPhone sales in the year of 2014. If we consider the average price of Apple device is $650 each then 12 million devices sales 7.5 billion in additional revenue of Apple.

Counter attack to other Smartphone vendors

Apple deal with china mobile network clearly shows it’s a counter attack for other Smartphone vendors. If we take Samsung which is the big competitor of Apple then this deal gives more power to the Apple Inc. According to me   Samsung will compete apple by regular release new mobile or aggressive discounts.

Investor’s risk

The joint deal of Apple and china mobile is a huge opportunity to make it strong position in Smartphone market .This big deal could easily bring huge benefit to Apple in additional operating profit to the next year. After this deal investor need access two risks here first regular release of Samsung Smartphone and second Apples operating margin in china may decrease.

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