Apple Moves One Step Closer to Dominating China
Jan 9th 2012 9:13PM
Updated Jan 9th 2012 9:14PM
China continues to represent one of the biggest growth catalysts for Apple (NAS: AAPL) in the coming years. With 3G penetration still hovering near 4% of the entire population, we're just now seeing the beginnings of a multiyear growth story within the world's most populous nation.
Currently, China Unicom (NYS: CHU) continues to be the sole official carrier of the iPhone. The iPhone 4S just got clearance to land before Chinese New Year with the carrier, with Jan. 13 being the date for locals to mark on their calendars. On top of that, the shiny new device can be had for the bargain price of $0 and one soul for two years.
A two-year service contract will get you a free 16 GB model, while signing away your soul for three long years will land you a 32 GB one. The low monthly service fee of just $45 may sound downright cheap compared with our stateside counterparts, but keep in mind that China's GDP per capita is roughly one-sixth of ours.
Well, we're now one step closer to Apple's domination of China, as an iPhone destined for China Telecom (NYS: CHA) has just received regulatory blessings. The China Radio Management office has cleared the device, bringing it closer to public hands. China Telecom's CDMA network is similar to Verizon's (NYS: VZ) , so it's not surprising for the Chinese carrier to be next in line.
It's still not obvious which specific iPhone model was approved, be it the newest iPhone 4S or an older model. China Telecom spokesman Xu Fei said discussions with Apple are still under way, and the carrier is hoping to begin selling an iPhone model this year, although "there's no timetable at the moment."
China Unicom and China Telecom are the second and third largest wireless carriers within the country, with approximately 196 million and 123 million mobile subscribers, respectively. Their combined 319 million subscribers still pales in comparison with China Mobile's (NYS: CHL) 644 million customers. As the largest carrier in the most populous nation, inevitably inking a deal with China Mobile will be key.
With the iPhone now available on the three largest domestic carriers, it's only a matter of time before China's three largest carriers see the same.
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At the time this article was published Fool contributor Evan Niu owns shares of Verizon Communications and Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Apple and China Mobile. Motley Fool newsletter services have recommended buying shares of Apple and China Mobile and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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