Apple Inc. iPhone 5C’s Lackluster Sales Could Affect China Mobile Deal

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Apple’s low cost iPhone 5C could affect their deal with China Mobile Ltd. (NYSE:CHL) (HKG:0941). Analyst Ming-Chi Kuo for KGI Securities explains that although Apple Inc. (NASDAQ:AAPL) and China Mobile have yet to seal the deal, the slow iPhone 5C sales might affect that deal.

Although this deal has yet to be finalized, there are still talks of a possible partnership. Kuo expalined, “We believe that weak sales of iPhone 5C may trigger a re-negotiation of the Apple-China Mobile partnership. However, the indications are that the deal is nearing an end. While recent market speculation calls for the deal to boost 1Q14 iPhone shipments to 45-50mn units, we think this is overly optimistic.”

Overall interest in the iPhone 5C declined and interest in the iPhone 5S has climbed. This could mean that Apple Inc. (NASDAQ:AAPL) has to change their terms to make the deal more appealing for China Mobile Ltd. (NYSE:CHL) (HKG:0941).

Apple Insider’s Mikey Campbell added, “The analyst’s latest surveys indicate that demand for a TD-LTE version of the iPhone 5c, which is compatible with China Mobile Ltd. (NYSE:CHL) (HKG:0941)’s unique 4G network infrastructure, has declined “dramatically” over the past weeks. Subscribers are now focused on the more expensive iPhone 5s, Kuo says. Due to the swing in demand, Kuo pegs TD-LTE iPhone 5c shipments at 1.0 to 1.5 million units in the fourth quarter of 2013 and under one million for the first quarter of 2014. This is apparently well below Apple Inc. (NASDAQ:AAPL)’s original production plan and would possibly require a renegotiation with the world’s largest wireless provider.”

China Mobile Ltd. (NYSE:CHL) (HKG:0941) presents the biggest opportunity for Apple. As the world’s largest carrier, China Mobile can elevate Apple Inc. (NASDAQ:AAPL) and garner them sales they might not otherwise get. China is a market that Apple really needs, especially if the company wants to continue leading the market. Android is the only thing that is hindering Apple Inc. (NASDAQ:AAPL)’s success.

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