China Mobile and Apple: One Step Closer to Offering Faster iPhone?

by Holly Shoemaker

China Mobile, Chinese largest mobile carrier, is actively talking to Apple to see how the two companies may better work together to offer the iPhone to its customers.

Earlier this year, China Unicom helped Apple launch the iPhone in China. This year, the ability to offer the iPhone spread to China Telecom.

Potential Challenges and Solutions to the China Mobile Issue

Apple and China Mobile have encountered compatibility issues. China Mobile uses custom technology that would require running specialized iPhone hardware to operate the network.

An upcoming wireless modem chip may solve the compatibility problem. That chip may allow the next-generation iPhone to run on China Mobile’s network. This would eliminate the need to build custom hardware.

The wireless modem chip seems like an ideal solution to help Apple continue to grow in the Chinese market. China Mobile has about 15 million iPhone customers. However, those customers may only operate on a 2G network.  

Concluding Thoughts

Apple will come to a solution with China Mobile. Apple understands the importance of the Chinese market when it comes to market share and profits. Apple also already committed to improving factory conditions and Apple understands how China impacts the company's revenue, especially when it comes to sales of the iPhone 4S.

iPhone Sales Increase Despite Weak iPhone Sales from AT&T and Verizon

by Holly Shoemaker

Despite Verizon and AT&T falling below expectations for iPhone sales, Apple’s iPhone profits steadily grew in Q1 2012.

Apple's Numbers at a Glance

Apple sold 35.1 million iPhones during Q1 2012, which beat analysts’ expectations.  Much of the growth is attributed to the iPhone 4S launching on China Unicom in January and China Telecom in March. Apple’s revenue in Asia grew by 32 percent over the previous quarter.

iPhone Numbers at a Glance for AT&T and Verizon 

• AT&T announced on Tuesday, April 24, 2012 that it activated 4.3 million devices.
•  Last week, Verizon reported that it activated 3.2 million devices for the first quarter.

Analysts contribute the drop in sales to three main reasons:

• The increase in completion from Google – Approximately half of all smartphone sales from Verizon were Android devices, while AT&T sold about 22 percent of non-Apple devices.
• Apple's selling cycle – Consumers know the pattern that Apple launches new products. Analysts say that Apple may no longer have the stamina to avoid seasonal decreases in sales. Apple is expected to launch the new iPhone, or the iPhone 5, the naming convention is unknown at this time, this summer.

Concluding Thoughts

While the numbers are down for certain carriers, Apple’s profits remain high. Because the intentional market accounts for roughly two-thirds of Apple sales, it is likely that overseas sales will compensate for any decline we may see in Q2 2012. In addition, the new iPad just went on sale in March.

What I find the most interesting is that selling less iPhones helps carriers because of the cost of selling the devices. Apple makes carriers pay high upfront costs. Therefore, selling fewer iPhones sometimes helps profit margins.