Apple Inc. (AAPL) And China Mobile: Possible $8 EPS Boost In 12 Months

0
Apple Inc. (AAPL) And China Mobile: Possible $8 EPS Boost In 12 Months
<a href="https://pixabay.com/users/ElisaRiva/">ElisaRiva</a> / Pixabay

The rumors about Apple Inc. (NASDAQ:AAPL) signing a deal with China Mobile continue to swirl, and analysts are making projections about what kind of benefits Apple could see from that deal. Stifel analysts estimate an incremental $4 to $8 in earnings per share estimate for Apple over the 12 months after a launch on the world’s largest mobile carrier.

Apple – China Mobile deal still expected on Dec. 18

At this point the media is pretty much sticking with the expectation that Apple Inc. (NASDAQ:AAPL) and China Mobile Ltd. (NYSE:CHL) (HKG:941) will reveal their plans to offer the iPhone on the latter’s network on Dec. 18. Many have paired the launch of the iPhone on China Mobile’s network with the handing out of 4G licenses by the Chinese government. This week the Ministry of Industry and Information Technology did just that, granting the licenses to China Mobile, China Unicom and China Telecom.

Deprival Super-Reaction Syndrome And Value Investing

Howard Marks oaktree capital value investing value investors valuation metrics famous investors PE ratio PB ratio EV/EBITDA PEG ratioDeprival Super-Reaction Syndrome And Investing. Part four of a short series on Charlie Munger’s Human Misjudgment Revisited. Charlie Munger On Avoiding Anchoring Bias Charlie Munger On The Power Of Prices The Munger Series - Learning . . . SORRY! This content is exclusively for paying members. SIGN UP HERE If you are subscribed and having an Read More


Also this week, a subsidiary of China Mobile Ltd. (NYSE:CHL) (HKG:941) posted a site accepting preorders for Apple’s iPhone 5S and 5C on the China Mobile network. That page was quickly taken down, however, after China Mobile denied having signed a deal with Apple.

How Apple could benefit from China Mobile

Stifel analyst Aaron C. Rakers and his team are projecting a gross margin in the low 40% range for Apple devices sold on China Mobile’s network. That equates to an incremental earnings per share estimate of between $4 and $8 over the 12 months after the launch. To gauge how important China Mobile could be for Apple Inc. (NASDAQ:AAPL), they considered the carrier’s 3G success.

China Mobile had more than 759 million total subscribers at the end of October, 176 million of which were 3G subscribers. That’s 23% of the carrier’s total installed base and 45% of China’s entire 3G mobile subscribership. The analysts note that China Mobile continues to capture most of China’s 3G net adds, taking in about 49% of them in October. They believe this trend could continue as China Mobile rolls out 4G LTE technology. If so, then Apple Inc. (NASDAQ:AAPL) would see tremendous benefits from a deal with the carrier.

No posts to display