Apple, Inc. Could Sell 16 Million China Mobile iPhones This Year

An iPhone sales figure this robust from China Mobile could substantially boost Apple's bottom line in 2014.

Mar 23, 2014 at 4:10PM

Investors waited years for Apple (NASDAQ:AAPL) to make a deal with the world's largest carrier, China Mobile (NYSE:CHL), to sell its iPhones. When the deal was finally set in stone, analysts were ready to share their opinion on Apple's potential 2014 incremental China Mobile iPhone sales. But the estimates varied so greatly they were hardly useful. Now, however, with our first somewhat concrete figure from China Mobile on Apple iPhone sales in one month at the carrier, estimates can be made with more precision.

Apple Store China

Based on the new data from China Mobile, it's now reasonable to assume Apple could sell 16 million China Mobile iPhones in 2014.

The initial range of estimates for Apple's China Mobile iPhone sales in 2014, assembled by Fortune's Philip Elmer-DeWitt in January ranged from 5 million to 39 million. The massive range made China Mobile Apple's wildcard catalyst.

But a new comment from China Mobile makes estimating Apple's potential easier -- and it's the first step in getting to an estimate for 16 million.

"We added 1.34 million new 4G users in February and most of them are iPhone users," China Mobile Chairman Xi Gouhua told The Wall Street Journal. "We are happy with the progress, as we are still building our 4G network and the coverage is only available in some major cities."

Assuming "most" means about 1 million of the 1.34 million new 4G users, Apple could be selling about 1 million iPhones a month. Extrapolating this number forward (and backward to January) at a steady pace, that's 12 million for 2014 -- meaningfully below the average consensus analyst estimate from the beginning of the year for 18 million.

How Apple gets to 16 million
But extrapolating 1 million monthly iPhone sales forward (and backward to January) at a steady rate isn't the most realistic scenario. Two major drivers should help iPhone sales ramp up later in the year.

First, China Mobile's 4G rollout is only getting started. Apple CFO Peter Oppenheimer said during the company's first-quarter earnings call that China Mobile's 4G network only covers 16 cities today and should cover more than 340 cities by year-end. After reiterating China Mobile's 4G rollout in the earnings call, Apple CEO Tim Cook hinted that the expansion should be a positive catalyst for Apple as the year goes on: "And so we've got quite the ramp in front of us, and we're incredibly excited."


iPhone 5c. Apple brought the iPhone 5c and 5s to China Mobile's network on Jan. 17.

Second, if Apple keeps its typical iPhone launch schedule, it will introduce a new iPhone lineup in September. After including China for the first time in the first rollout of its new iPhones last year, Apple will likely do the same this year. That leaves about three and a half months for Apple's new lineup of iPhones to record sales on China Mobile's network.

With these drivers in mind, an estimate for 16 million iPhones sold on China Mobile's network is more realistic than 12 million.

The impact?
Apple sold 153.4 million iPhones in calendar 2013. So Apple's arrangement with China Mobile could boost Apple's iPhone sales in 2014 by 10% if it results in 16 million iPhone sales in 2014. Considering that Apple's iPhone segment is the company's most profitable business, a 10% boost in iPhone sales would likely have an outsized impact on Apple's bottom line. With growth like this, Apple's current conservative valuation of just 13 times earnings may be lowballing Apple's potential.

3 stock picks for the long haul
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. 

Daniel Sparks owns shares of Apple. The Motley Fool recommends Apple and owns shares of Apple and China Mobile. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers