iPhones Come To China (Officially) In October

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    Posted: 28 September 2009 01:51 PM

    China Unicom iPhone Sales to Start in October

    “China Unicom (Hong Kong) Ltd. said Monday it will begin offering Apple Inc.‘s iPhone in China in October at a retail price of around 5,000 yuan ($732).”

    http://online.wsj.com/article/SB125412684524545851.html

    $732 seems pretty pricey . .  .


    more here:
    http://www.appleinsider.com/articles/09/09/28/apples_iphone_abroad_orange_uk_to_sell_china_debut_in_october.html

         
  • Posted: 10 October 2009 05:40 AM #1

    Here is something I don’t get.  If, as stated by both Unicom and APPL, Unicom will buy their inventory outright and they plan to ship phones this month then how come APPL has not announced the sale.  They have a firm order and will have already shipped a huge number of units - at least 1 million I would guess.  Even at discounted prices that should represent at least $100 million NET revenue to APPL for the 1st quarter of 2010 if not the 4th of fiscal 2009.  That is material, even for APPL.  Would they not be obliged by SEC rules to announce the sale once they recognize the revenue which should be on shipment?

    If they purposely have held the revenue recognition off until Q1 they are going to have an absolutely massive Q1 because of US Thanksgiving and Christmas sales - maybe bigger than MSFT for the first time.

    Any insights would be appreciated.

         
  • Posted: 10 October 2009 11:10 AM #2

    davswa, analysts are estimated GAAP revenue for the December quarter of over $11 billion. A recognition of $100 million of GAAP revenue from pre-sales to China would represent less than 1% of anticipated revenue. Yes. The sale is large and AAPL will be benefit, but it will be a small percent of recognized revenue when realized in FQ1.

         
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    Posted: 10 October 2009 01:17 PM #3

    Wow, does that mean that Palm has to disclose every single time they sell a Pre unit? Because that would be material for them.  :wink:

    Seriously, I believe contracts relating to ordinary course of business are not disclosure items, but I’m no lawyer.

         
  • Posted: 10 October 2009 04:08 PM #4

    deagol - 10 October 2009 04:17 PM

    Wow, does that mean that Palm has to disclose every single time they sell a Pre unit? Because that would be material for them.  :wink:

    Seriously, I believe contracts relating to ordinary course of business are not disclosure items, but I’m no lawyer.

    The agreement (as we know) was publicly disclosed. Information about units shipped might not be delineated by nation. I’m expecting successive blow-out quarters regardless of when the China units are booked.

         
  • Posted: 10 October 2009 04:11 PM #5

    davswa - 10 October 2009 08:40 AM

    If they purposely have held the revenue recognition off until Q1 they are going to have an absolutely massive Q1 because of US Thanksgiving and Christmas sales - maybe bigger than MSFT for the first time.

    Any insights would be appreciated.

    Analysts are estimating MSFT will report north of $17 billion in revenue in the December quarter. There may come a time at which Apple surpasses MSFT’s reported revenue but that time isn’t now. Give it a couple of years.  grin

         
  • Posted: 10 October 2009 04:11 PM #6

    davswa - 10 October 2009 08:40 AM

    Here is something I don’t get.  If, as stated by both Unicom and APPL, Unicom will buy their inventory outright and they plan to ship phones this month then how come APPL has not announced the sale.

    China Unicom has confirmed a pre-purchase of iPhones but they did not reveal the quantity and timeline. I suspect the rumored (leaked) 5 million minimum quantity is accurate but China Unicom will likely stage their inventory build and payments over a two-year period and up the order as necessary.

    Apple has said virtually nothing about the China deal. The only communication that I’ve seen was a one sentence e-mail from Apple spokesperson Natalie Kerris confirming that the deal with China Unicom is “non-exclusive.”  That’s it. Apple hasn’t even changed their iPhone “coming soon” countries list to reflect the end of month iPhone launch in China. That is no doubt an oversight as Apple is now helping to promote iPhone in China via the pre-launch “reserve your iPhone” campaign and other Apple website promos > http://www.apple.com.cn/iphone/
    http://shop.10010.com/terminal/iphone/iphonesalepackage.jsp

    China Unicom is driving this bus and I think Apple would pefer to keep out of the way (say nothing). Part of the reason for Apple’s silence may be due to remaining regulatory hurdles related WAPI/WiFi on iPhone in China. I recently updated a post on the China WiFi topic here >  http://iphonasia.com/?p=7165

    Apple is also continuing conversations with China Mobile ... If this deal happens, my bet is for a low-priced 2G (EDGE) model with China Mobile. Apple’s International team is also in the midst of final negotiations with KT and SK Telecom for an iPhone launch in South Korea.

         
  • Posted: 10 October 2009 07:22 PM #7

    idannyb - 10 October 2009 07:11 PM

    Apple is also continuing conversations with China Mobile ... If this deal happens, my bet is for a low-priced 2G (EDGE) model with China Mobile.

    I hadn’t thought of that. The price could be dropped considerably and it would be easier to penetrate other demographic strata in the country.

         
  • Posted: 12 October 2009 09:51 PM #8

    For those that didn’t see it, there was some nasty FUD posted today courtesy of Barrons. Had a busy day but managed to post a rebuttal later in the day
    Excerpt: Huh? Say again?! In a post today on Barrons? Tech Trader Daily, reporter Eric Savitz asked the question ?Is Apple (AAPL) running into trouble in China?? Savitz then reposted an excerpt from a Northeast Securities research brief authored by tech analyst Ashok Kumar.

    FWIW ... http://iphonasia.com/?p=7232