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The iPhone 5 Grabs Preorders in China

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The iPhone 5 lands in China later this month, launching in the Middle Kingdom on Dec. 14, and Apple's (NASDAQ: AAPL  ) two official carrier partners have already begun taking preorders for the device.

China Unicom (NYSE: CHU  ) , which was Apple's first iPhone carrier in China, has garnered over 100,000 preorders for the iPhone 5. Smaller rival China Telecom (NYSE: CHA  ) didn't disclose its overall figures, but its Beijing Telecom subsidiary said it's now up to 5,000 preorders. Apple and its carrier partners are moving quickly to launch the newest iPhone in the country, shortly after obtaining the third and final necessary regulatory approval.

The approximately 105,000 preorders may not stack up to the 2 million preorders that the iPhone 5 garnered within its first 24 hours, but there's already been a very active grey market for a while now. The iPhone 5 launched in Hong Kong (which is considered separate from Mainland China) along with Singapore and Japan on Sept. 21. Ambitious scalpers smuggle the devices in to Mainland China and earn a healthy mark up for their troubles.

That means some demand from early adopters willing to pay a premium may already be satisfied, while Apple has also gone to extreme lengths to mitigate scalpers at local product launches. That also puts downward pressure on preorder activity, since there are armies of organized scalpers anxious to get their hands on Apple products.

Combined, there are now 318 million subscribers between China Unicom and China Telecom, including nearly 133 million 3G subscribers. Top dog China Mobile (NYSE: CHL  ) just recently passed the 700-million-subscriber threshold in October, including over 79 million 3G users. Despite lacking an official partnership, China Mobile said earlier this year it has 15 million iPhones on its network. Due to network incompatibilities, those devices are relegated to slower data speeds, similar to iPhones on T-Mobile's network in the U.S. until recently.

On the last conference call, Tim Cook said iPhone sales were up 38% last quarter in greater China (which includes Hong Kong), which is impressive considering the iPhone 5 was incoming. Current preorders may seem underwhelming, but don't be surprised if the iPhone 5 gets a massive turnout like the iPhone 4S did in January.

There's no doubt that Apple is at the center of technology's largest revolution ever, and that longtime shareholders have been handsomely rewarded with over 1,000% gains. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and more importantly, your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

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  • Report this Comment On December 05, 2012, at 11:35 AM, Hotcreek7 wrote:

    I have a Chinese college student living with us. He is going back to china for winter break with 4 unlocked iPhone 5's. he has a friend who is taking home 100 iPhone 5's to sell. In all there are 1000 Chinese students at the U of O alone. I wonder how many I products are going with them.

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