Apple Inc. (AAPL) Pricing Strategy At China Mobile Still Unknown

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Apple Inc. (NASDAQ:AAPL) crossed a major barrier when it finalized a deal with China Mobile recently, but now analysts at some firms are eyeing another challenge. Charlie Wolf of Needham and Company remains Buy-rated on Apple at this point—pending the announcement of the company’s pricing strategy at the carrier.

China Mobile starts supporting Apple’s iPhone in January

China Mobile Ltd. (ADR) (NYSE:CHL) (HKG:941) has already been taking orders for Apple’s iPhone, but the device won’t officially be supported on the carrier’s network until in January. At this point though, we still don’t know exactly what the prices will look like.

Estimates of how many iPhones Apple Inc. (NASDAQ:AAPL) will sell on China Mobile’s network have varied widely—from 10 million up to 30 million—but those estimates depend on the retail prices of the handset. Apple’s total addressable market in China could be rather small since many consumers there just can’t afford the company’s pricey phones.  If China Mobile Ltd. (ADR) (NYSE:CHL) (HKG:941) partially subsidizes the price of the iPhone, however, more consumers might be able to afford it.

April reports in January

In addition to the China Mobile deal beginning in January, another potential catalyst for Apple Inc. (NASDAQ:AAPL) next month is its next earnings report, which covers the key holiday shopping quarter. Apple’s report comes in the second half of the month, and analysts and investors will be anxiously watching to see how the new iPhone and iPad models have been selling. Of course we won’t see any significant effects from China Mobile until the March quarter, but analysts have high hopes for the December quarter because of surveys and the holiday shopping season.

Wolf reiterated his $595 per share price target for Apple, along with his Buy rating, saying he isn’t making any adjustments to his estimates until he hears more about iPhone prices at China Mobile and sees Apple’s January report.

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