As Apple’s major fall event nears, rumors surrounding Apple Inc. (NASDAQ:AAPL) are also increasing; like launching the new iPhones at NTT DoCoMo, China Mobile Ltd. (ADR)(NYSE:CHL) and the unveiling of a phablet. Analysts Tavis C. McCourt and Daniel Toomey at Raymond James have provided “some quick math” in this respect “to help with the incremental opportunity.”
Alliance with NTT DoCoMo will result in incremental gain for Apple
Apple, at present, is available on Softbank and KDDI who capture 50% of the Japanese wireless market. In the previous four quarters, Apple garnered a 26% share on average in the Japanese smartphone market, or 50% with its present carrier ties. With launching on NTT DoCoMo, Apple may further boost its reach. For the last four quarters, the company sold an average of 2.5 million iPhones per quarter in Japan, and with the launch on NTT DoCoMo this number may increase to 5 million per quarter.
Analysts estimate that NTT DoCoMo will add an additional 10 million iPhone sales per year.
China Mobile deal will also be helpful
In China, Apple Inc. (NASDAQ:AAPL) is in tie up with China Telecom Corporation Limited (ADR)(NYSE:CHA) and China Unicom networks. However, China Mobile is the largest carrier in China with 63% of all China’s subscribers. Apple iPhone is not yet available on China Mobile. China Mobile is backed by the 2G base, which it has in rural areas. It can also be said that China Mobile has 40% of 3G subscribers in China while Unicom and Telecom split the other 60%.
In the past four quarters, around 5 million iPhones have been sold in mainland China (growing double digits) and assuming if China Mobile accounts for 40% of the higher end China market and expands to a few million units per quarter then iPhone sales will total to approximately 11 million quarter per year initially if China Mobile were to carry the iPhone, or an incremental 25 million per year, estimate the analysts.
Phablets, China Mobile, NTT DoCoMo present incremental gains
Analysts expect that Galaxy Note phablet sales will approximate 25 million units per year or one third of total Galaxy S smartphones. Further, they expect that for Apple, half of the phablet opportunity is incremental and half “cannibalistic” to iPhones or iPads or both.
Apple Inc. (NASDAQ:AAPL) at present clocks total sales of 150 million annually in the iPhone segment and phablet could fuel this growth by 17%. Launching the devices on China Mobile will have an almost similar effect while the NTT DoCoMo launch may impact iPhone sales positively by 7%. Apple Inc. (NASDAQ:AAPL) can raise sales to 210 million annually if all three possibilities are met.
