China Mobile-Apple Rumors Inch Closer to Reality

The rumor mill has actively gossiped about a potential deal between Apple (NASDAQ: AAPL  ) and China Mobile (NYSE: CHL  ) for years. Unfortunately, there's no causational relationship between rumors and deals. But even though the deal has never come to fruition despite numerous rumors over the years, there's no reason to give up on the possibility -- especially given the recent sharp rise in related chatter.

If you haven't followed the latest word on the block regarding a potential Apple and China Mobile deal, you've been missing out.

Let's review:

  • Rumors started getting serious again when China Mobile Chairman Xi Guohua expressed positivity about a potential deal between the two companies to Reuters back in August.
  • The likelihood of a deal really heated up when The Wall Street Journal cited people familiar with the matter saying that Apple is preparing to ship iPhones to China Mobile.
  • Then Apple's new iPhone models launched with LTE band support compatible with China Mobile's network. 
  • A day after Apple's iPhone event, The Wall Street Journal reported that a Chinese regulatory body gave Apple the final license needed to launch the iPhone on China Mobile's wireless standard.
  • And now Unwired View points out a leaked poster that suggests China Mobile will use the launch of the new iPhones to promote its next-generation network launch.

Leaked poster. Source: Unwired View.

Apple's biggest catalyst?
A deal between Apple and China Mobile could be the company's largest potential catalyst in sight. China itself is a crucial market for the company. Not only is it the world's largest smartphone market, but the 3G penetration for the country overall is still just around 30%. Even more, IDC still has big expectations for the Chinese smartphone market, expecting shipments to increase from an estimated 360 million in 2013 to exceed 450 million in 2014.

But there's more to the story specifically related to China Mobile. First of all, there's the in-your-face big number of 750.4 million -- China Mobile's subscriber base. And a closer look at the company's subscriber base reveals an even greater reason for a huge potential catalyst. China Mobile's 3G penetration is just 21% -- much lower than the 3G penetration levels of its smaller peers China Telecom and China Unicom. China Mobile's potential market of first-time iPhone buyers is enormous.

Since Apple's iPhone sales account for more than half of its revenue, any major catalyst for the company's iPhone segment is also a major driver for the business as a whole. In July, I highlighted China Mobile as one of two potential growth drivers that could help Apple return to earnings growth. With China mobile rumors inching closer to reality, this major growth driver may soon finally deliver.

Learn more about Apple stock
If someone asked you, "Why invest in Apple?" Could you truly answer them? To be honest, few investors could. That's because most of the company's secrets -- the ones that make savvy market watchers rich -- often fly below the radar. If you want an edge on other Apple investors, be sure to check out "5 Secrets to Apple's Future" from The Motley Fool. This 100% FREE guide includes actionable advice that you can put to use right now! Just click here now for instant access!


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  • Report this Comment On September 26, 2013, at 9:15 PM, myeerah wrote:

    I'm sorry.This is not really a comment about this particular article but more about samsung versus apple.Can someone please explain to me why I keep reading stuff about how Samsung is a step ahead of apple and such a creative company? Who created the disruptive products? Apple did! Samsung copies apple.What has samsung done other then make the phaplet? Another question might be, what do people want there smartphones to do? Wipe there ass? Until Samsung actually does/creates something on its own I'm just not impressed.No need to tell me I'm a fanboy, I know I am........just tell me why Samsung has no critics out there and tell me what have they REALLY done!!

  • Report this Comment On September 27, 2013, at 12:59 AM, dwilh51183 wrote:

    SAMSUNG IN THEIR EARLY RELATIONSHIP WITH AAPL AND STEVE JOBS MUST HAVE SENT THE CEO A CLOCK OR SOMETHING ON AAPL'S DESK THAT IS WIRED OR BUGGED TO A TRANSMITTER SO THEY CAN LISTEN TO ALL AAPL'S EXECUTIVE MEETINGS ON NEW PRODUCTS. LEAVE IT TO SAMSUNG TO FIND A WAY TO CHEAT /STEAL/COPY/BRIBE JUDGES LIKE LUCY KOH.

    WHY DOESNT THE MEDIA JUMP ALL OVER SAMSUNG FOR THEIR PHONES CRAPPY RECEPTION AND PHONE CALLS SKIPPING VOICES AND LOST CALLS FROM ANTENNA W POOR QUALITY. PLUS ALL THE PLASTIC COMPONENTS. THIS IS WHY THEIR ARE MORE SAMSUNG PHONES UP FOR SALE. THESE OWNERS ARE TIRED OF THE SAME CONVERSATIONS WITH OTHER SAMSUNG PHONE OWNERS:" WHAT?, I CANT UNDERSTAND YOU! HELLO? ARE YOU STILL THERE? LET ME CALL YOU BACK WHEN I GET ON TOP OF A MOUNTAIN. LOL THEY ALL WANT A QUALITY IPHONE NOW .AAPL ROCKS

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