Apple Stock This Week: Carrier Battles and Lackluster Preorders

Apple (NASDAQ: AAPL  ) finished the week down about 1.5%, slightly underperforming the S&P 500's smaller loss and suggesting the market's sentiment toward Apple stock was basically unchanged this week. Here is the most important news and analysis related to Apple stock that surfaced during the week.

iPhone 5c.

Underwhelming iPhone preorders at China Mobile?
After a Dec. 22 announcement that Apple has finally officially put ink on a deal with China Mobile, the world's largest carrier's iPhone preorders and sales are set to be closely scrutinized by the Street. In fact, estimates are already under way. Estimates began with forecasts for iPhone sales at the carrier in China Mobile. Now Wedge Partners (via Cult of Mac) has put a figure on preorder estimates for the first weekend, estimating orders of 100,000. That's less than the 120,000 and 150,000 estimated preorders for China Unicom and China Telecom, respectively, when they launched the iPhone 5s and 5c in September.

Though 100,000 orders may seem small for a carrier that boasts 763.3 million total wireless customers, Fool contributor Adam Levy isn't worried about the underwhelming number. Beyond the fact that the iPhone lineup is several months old now, Levy suggests that the most important thesis for Apple in China remains unchanged: over the long haul, a steadily growing Chinese economy will provide an ongoing stream of new customers for Apple.

Carrier battles
In an effort to lash back at T-Mobile after the carrier's gains in subscribers, AT&T has announced on Friday that it is offering up to $450 in credits to customers who switch to its wireless services from T-Mobile.

The credits come in two forms. First, customers switching to AT&T who trade in their smartphones can get a gift card for another phone worth up to $250, though it's still unclear exactly what phones will qualify. Second, the other $200 is simply a credit for switching that can be applied to a customer's bill or other AT&T products or services.

T-Mobile, according to Wall Street Journal author Ryan Knutson, was "widely expected to offer a similar promotion" before AT&T announced the deal. While these promotional and discount battles may weigh on the carriers' operating expenses, they're beneficial to Apple. Considering the premium prices required to buy Apple's iPhones, discounts like these may, in some cases, provide enough incremental motivation to compel a borderline iPhone customer to upgrade to the latest model. Most importantly, the irrefutably heated competition suggests that subsidies, whether they come in the form of traditional phone subsidies, interest-free financing, or big discounts, likely aren't going anywhere.

Meaningful news?
The week's Apple news wasn't pertinent enough to have any impact on a long-term investing thesis for Apple stock. Going forward, it will be worth taking a look at opening weekend sales of iPhones on China Mobile's network if the company decides to share them. The iPhone officially launches on the network on Jan. 17. Meanwhile, I remain convinced the stock is priced too conservatively and is an excellent holding for investors with a Foolishly long-term horizon.

The best stocks are the ones you don't have to worry about
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Read/Post Comments (3) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 04, 2014, at 12:28 PM, Thompr97 wrote:

    Chaim is right. China Mobile hasn't even announced pricing. These are folks that want iPhone regardless of price. Once prices are established and actual orders are underway, watch those sales climb - especially if there are decent subsidies like on the competing Chinese carriers.

  • Report this Comment On January 04, 2014, at 4:50 PM, 2sour wrote:

    guys ... go easy on Daniel ... he's just trying to get a better buying opportunity.

  • Report this Comment On January 04, 2014, at 11:31 PM, johnestromjr wrote:

    Daniel, I think things will pick up once they roll out 4G TD LTE. Right now it's only in a handful of cities. By year's end [supposedly] it will be in 530 cities with a combined population of over 500 million. Apple should also get a bump for Chinese New Year which occurs on January 31st. Patience, grasshopper.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2782938, ~/Articles/ArticleHandler.aspx, 9/1/2015 10:08:45 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Daniel Sparks

Daniel is a senior technology specialist at The Motley Fool. To get the inside scoop on his coverage of technology companies, follow him on Twitter.

Today's Market

updated Moments ago Sponsored by:
DOW 16,219.56 -308.47 -1.87%
S&P 500 1,933.66 -38.52 -1.95%
NASD 4,710.45 -66.06 -1.38%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/1/2015 9:49 AM
AAPL $111.59 Down -1.17 -1.04%
Apple CAPS Rating: ****