For Immediate Release
Chicago, IL – May 18, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Apple Inc. , China Mobile Ltd (), China Unicom Ltd (), China Telecom Corp () and Google .
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Here are highlights from Thursday’s Analyst Blog:
Apple to Choose China Mobile
Apple Inc. will likely choose China Mobile Ltd () as its new telecom partner in China, as per a recent news feed from Bloomberg. Both the companies have started discussions and it will take some time before they strike a deal. Consequently, the iPhone from China Mobile is not expected to hit the market this year.
Currently, China Mobile is considering a transition to the latest fourth generation (4G) wireless network. China Mobile’s 4G network is already being tested and is expected to hit nine cities by the end of this year. The transition will not only allow the company to offer iPhone in China but will also boost its sagging market share going forward.
We believe that Apple will benefit equally from the partnership with China Mobile over the long term. Although both China Unicom Ltd and China Telecom Corp offer the iPhone, their subscriber bases are comparatively small, with 209.5 million and 135.8 million, respectively.
Moreover, China Mobile will be the first telecom carrier in mainland China to offer a 4G network. We believe that a partnership with China Mobile will rapidly expand Apple’s market share in China.
China is becoming a very important market for Apple. In its latest quarterly report, Apple reported that iPhone sales in Greater China tripled to $7.9 billion (faster growth than any other region), based on the iPhone 4S release and the addition of China Telecom as an iPhone carrier. Apple also stated that it has sold five times as many iPhones in China as it did in the year-ago quarter.
Currently, 3G penetration rate in China is approximately 15.0% of the total mobile subscriber base, which reflects significant growth opportunity, in our view. Apple noted that the growth of the affluent middle class in China bodes well for its products, particularly iPhone. We believe that strong demand for both iPhone and iPad (the latest version yet to launch in China) in China will not only boost Apple’s top-line but will also offset sluggish growth in the domestic and European markets.
However, Apple is not the only one to benefit from this significant growth opportunity in China. We believe that Google’s Android operating system, which commands a market share of approximately 68.4% versus iOS’s 5.7%, will continue to provide significant competition to Apple in China. South Korean handset maker Samsung is expected to benefit most from this dominant position of Android in China.
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