Apple chief executive officer Tim Cook was in China this week, where he granted local media outlets an interview and confirmed that he is dealing with China Mobile officials, specifically chairman Xi Gouhua.
This event is of great interest to market insiders, as China Mobile, despite being the world’s largest mobile carrier, has yet to offer the iPhone to subscribers. Apple and China Mobile have long been rumored to be in discussions with each other, though nothing has come out of these talks up to now. However, both Cook and Gouhua are apparently in discussions, as confirmed by China Mobile to CNBC, though the exact matters discussed were not disclosed due to a confidentiality agreement signed by both parties. China’s two other major carriers, China Unicom and China Telecom, presently offer the iPhone to their subscribers.
If a deal between China Mobile and Apple is consummated, then that could mean about 13 percent of China Mobile’s nearly 76 million 3G subscribers purchasing an iPhone, according to RBC Capital Markets analyst Amit Daryanani. This would be on top of a percentage of China Mobile’s existing 700 million subscribers who may likely be enticed to purchase an iPhone on a carrier price plan. This deal could also potentially add $3 to Apple’s yearly annual earnings per share, and could add some $45 to its stock price per share, as earlier forecasted by Daryanani.
Apple officials, primarily Cook, have long seen China as having potential to become Apple’s largest worldwide market. Currently, it is second to the United States, and does indeed have potential to become the largest at some point in the future. 3G subscribers in China increased by nearly 90 percent year over year last year to 222 million, further underscoring the immense revenue potential if Apple is able to monetize the potential deal with China Mobile for the latter to carry the iPhone.