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Apple Signs Major iPhone Deal with China Mobile

Apple Signs Major iPhone Deal with China Mobile
December 7, 2013 12:16PM

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With the iPhone finally becoming available on China Mobile in December, Samsung will no longer be able to dominate the smartphone sector of the carrier without a major competitor. So far, HTC has been the only company putting up a fight in China against Samsung, but this new deal for the iPhone with China Mobile will change that.

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Prior to the release of the iPhone 5S and 5C, Apple was already trying to expand into Asian markets and was able to do so with its latest iPhones and iPads. Among the countries that Apple is currently trying to break into is China, which is the world's largest country by far.

Apple has already been able to sign deals with some of China's carriers but up until now, a deal has not been reached with China Mobile, which is the world's largest mobile service carrier. Now that this deal is coming down the pipeline, Apple's shareholders are ecstatic.

Doubling Its Sales

Though the deal has not yet been publicly announced, Apple and China Mobile are reportedly set to partner up shortly and once that happens analysts are expecting Apple's sales to double within the country. The deal would allow Apple to grow its sales within China at a rate which is faster than the growth of the smartphone market itself, allowing Apple to leapfrog its competitors.

Potentially, the China Mobile deal may wind up being one of the best things that has ever happened to Apple. Currently, only 23% of China Mobile's customers are on a 3G plan. And, while some people see this as a limiting factor for iPhone sales, other industry observers are suggesting that the lack of 3G penetration within China is actually a good thing for Apple.

Many analysts have come out in agreement that the lack of 3G subscribers could mean very few people with a China Mobile plan have experience with an operating system that is competing against Apple. Had this deal come later or had 3G plans become more popular in China prior to the agreement, Apple would have to convince people that the iPhone is better than an Android device.

Bad For Samsung

With the iPhone reportedly becoming available through China Mobile in December, Samsung will no longer be able to dominate the smartphone sector of the carrier without a major competitor. So far, HTC has been the only company putting up a fight in China against Samsung, but with fewer devices the Galaxy line of smartphones has continuously come out on top.

Samsung's CEO has admitted that it is focussing on the high-end market in China ,but as we have seen in other countries ranging from the United States to India, Apple rules the high-end market. Of course, Samsung will be able to shift its attention to cheaper devices since some of its Android smartphones can undercut the 5S or 5C when it comes to price.

If Samsung choses not to shift to the lower-end market in China, the deal between Apple and China Mobile will most likely result in lower Galaxy sales, which could force another drop in Samsung's share value.

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