Apple Inc. (NASDAQ:AAPL) decision on the timing for the launch of the iPhone 6 and iPhone Plus in China will continue to remain a topic of discussion among investors, especially after last week’s report that the company had received two of three licenses required to enter the Chinese market, says a new report from Stifel. The report, dated September 22, 2014, is authored by analysts Aaron C. Rakers, Sanjiv R. Wadhwani, Joseph Quatrochi, Andrew Shinn and William C. Peterson.
Uncertainty over Apple status in China
China is not currently included in the list of markets where the iPhone is set to launch on September 26th. In view of these developments, the Stifel analysts are “interested in thinking about our / street combined September and December quarter estimates relative to a year ago,” as iPhone 5S and 5C were launched in the first wave in China.
Tiger Legatus Master Fund was up 0.1% net for the second quarter, compared to the MSCI World Index's 7.9% return and the S&P 500's 8.5% gain. For the first half of the year, Tiger Legatus is up 9%, while the MSCI World Index has gained 13.3%, and the S&P has returned 15.3%. Q2 2021 hedge Read More
The delay over the China launch has impacted the shares of both Apple and domestic telecom carriers in China. There has been speculation and uncertainty over the availability of the iPhone in China as well; Reuters reported that the approval publicized by Xinhua might have been granted in July.
Moreover, Apple Inc.’s silence over the matter is supporting the rumors that it is facing problem in obtaining the requisite licenses from the Ministry of Industry and Information Technology (MIIT), which approves phone before they are sold in China. Reuters, citing a source familiar with the development, says that MIIT generally takes a month or two to grant a license.
Shipments estimate by analysts
The analysts expect iPhone shipments to grow by 13.6% year over year to 96.3 million compared to 84.8 million for the same period “post iPhone 5s/c.” Last year, shipments for the combined quarters increased by 13.5% year over year, “which leaves us to think about upside given our expectation of a stronger iPhone 6 product cycle,” the analysts note.
At the end of the second-quarter, China Mobile had 242 TD-LTE phones for sale compared to 19 in January 2014. The carrier witnessed an average price after June of RMB 1,900 (or ~$308) relative to RMB 5,100 (or ~$827) in January 2014. According to President He Ning of China Mobile Devices, Chinese smartphone players like Coolpad and Lenovo will start selling 4G smartphones at RMB500 (or ~$82) or even below by the end of this year. This will help in determining the competitiveness of the entry-level and mid-range Apple iPhone 5c and iPhone 5s, which are priced at $730 and $535, respectively.