Analyst: Apple Closing in on China Telecom iPhone Deal

| Apple Stock Watch

With the CDMA-compatible version of the iPhone 4 out and available on Verizon’s cell network in the U.S., Apple is apparently working on a deal with China Telecom, according to Ticonderoga Securities analyst Brian White. Once the two companies finish working out the details, Apple’s CDMA iPhone 4 will have another foothold in China’s massive cellphone market.

“The relationship between Apple and China Telecom is clearly moving in the right direction, and we believe that a deal will eventually be announced this year,” Mr. White said.

Currently Apple’s GSM-based iPhone is available on China Unicom’s cell network. China Telecom hasn’t been able to get in on the iPhone action because it’s CDMA-based network isn’t compatible with the GSM version of the iPhone.

China Telecom wants Apple’s iPhone

According to Barrons, Mr. White claimed a branch of China Telecom is already accepting pre-orders for the CDMA-based iPhone 4 despite the fact that a deal with Apple hasn’t been finalized.

Assuming the two companies do reach an agreement, Apple could have a large potential customer base open up.

“As the Apple fever continues to build in China, the launch of the iPhone CDMA EVDO on China Telecom’s network would provide Apple with additional momentum in the Chinese market,” Mr. White said. “Keep in mind, according to the CDMA Development Group, approximately 58 percent of the estimated 550 million CDMA subscribers worldwide are located in Asia.”

He added that bringing the CDMA-compatible iPhone 4 into the country “would ultimately open the door for the iPhone to tap into China’s 842 million wireless subscribers.”

Mr. White is maintaining his “Buy” rating and US$550 target price for Apple’s stock.

Comments

Constable Odo

I sure hope they get the deal done, but unless Apple builds a less expensive iPhone for the Chinese subscriber, it probably won’t go over very well.  For all I know, the Chinese may not even be ready to move to smartphones. This looks like a market that Android is going to easily take over with cheap unsubsidized smartphones.  Still, even an extra million iPhones on various carriers might help to stabilize Apple shares and somewhat slow down Android growth.

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