China iPhone Projections

Apple’s sales in China could soon reach 60 million per year, predicts Morgan Stanley. Apple sold 68.5 million iPhones worldwide in fiscal 2011, although the iPhone 4S, launched in October, sold more than half that many (37 million) in just one quarter.

Morgan Stanley’s Katy Huberty surveyed the buying patterns among China’s rapidly growing middle class and expects Apple to sign deals with both China Mobile (TD-LTE) and China Telecom (CDMA).

She says:

  • There are roughly 150 million high-end subscribers in China currently paying at least RMB 100 ($16) per month for mobile phone service.
  • China Unicom, currently Apple’s only official (GSM) carrier, has 15 million of those subscribers, or roughly 10%.
  • Late this year or early next, Apple will begin selling next-generation iPhones through China Mobile (120 million high-end subscribers) and China Telecom (15 million).
  • Assuming 20% penetration, Apple should see, at a minimum, 24 million addition iPhone sales in 2013.
  • As the iPhone catches on and the middle class expands, that number could grow to nearly 40 million next year, adding $10 to Apple’s earnings per share.
  • Eventually the iPhone in China will reach penetration levels comparable to those of AT&T, where 63% of smartphone customers currently choose iPhones.
  • In Morgan Stanley’s scenario, Apple within a couple of years will be selling an additional 57 million iPhones per year in China alone.

As of January 2012, China Mobile is the world’s largest mobile phone operator with about 650 million subscribers. By the June 2010, China had 420 million internet users. That’s greater than the population of the USA, however penetration rate is still relatively low at just under 32%

China Mobile is driving TD-LTE in China. The company is testing TD-LTE in 6 cities, including Shanghai, Hangzhou, Nanjing, Guangzhou, Shenzhen and Xiamen. Telecom giants such as Alcatel-Lucent, Ericsson, Huawei, and ZTE, have participated in technical trials of TD-LTE technology with China Mobile since the end of 2008.

Related LTE stories on Dailywireless include; Clearwire and China Mobile Announce TD-LTE Testing Plan, China Mobile + Clearwire + Apple?, China Mobile Talks Up TD-LTE iPhone, World’s First TD-LTE Service Launched by Mobily, China: The Big Picture, TD-LTE for China Mobile, China Mobile: Slow TD-SCDMA Sales, South Korea: SK Telecom Goes LTE, World’s First TD-LTE Data Call, End Near for Indian WiMAX?

Posted by Sam Churchill on .

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