Analyst Brian White of Ticonderoga Securities pointed his clients to comments from China Telecom CEO Wang Xiaochu that indicate the company is in ongoing negotiations with Apple for an iPhone deal. With 103 million subscribers (17.8 million of whom are 3G subscribers), the firm would make a large addition to Apple’s potential pool of customers.
The comments came in in an interview with the Chinese character version People.com.cn (as in The People’s Daily Review, not a Chinese edition of People magazine), and the analyst sees this as an indication the two companies are closer to striking a deal than had previously been thought.
“In our view,” the analyst said, “this news flow suggests further progress toward a CDMA version of the iPhone in China; however, we expect any launch will surround the next gen iPhone due in September, rather than the current iPhone 4.”
China Telecom is a CDMA-based carrier, and is one of the companies that had sometimes been named in the CDMA iPhone 4 rumors that eventually materialized as the deal with U.S. carrier Verizon.
The analyst also noted that an article at another Chinese language publication, NetEase.com, had reported that Apple and China Mobile were moving closer to a TD-LTE iPhone deal for that company’s LTE network. China Mobile is the world’s largest carrier, with more than 584 million subscribers, not quite double the entire population of the U.S.
Apple doesn’t currently have an LTE iPhone, nor has one been announced. Rumors have been mixed on whether the company would introduce an LTE-based device in the next iteration, currently referred to in speculation as the iPhone 5, or wait for a 2012 iPhone 6 upgrade to introduce the technology.
Only Verizon has a significant LTE network in the U.S., and the technology is still on the newer side outside the U.S., too, but AT&T is working on the technology.
Mr. White maintained his “Buy” rating on AAPL. His current price target on the stock is $612, well above consensus estimates of ~$446.
Shares in Apple moved lower Friday to end the day at $335.22, down $5.31 (-1.56%), on moderate volume of 12 million shares trading hands (a significant portion of that volume moved in the closing minutes of trading).
*In the interest of full disclosure, the author holds a small share in AAPL stock that was not an influence in the creation of this article.