The REAL reason Apple delayed the iPhone 5 until September

  • Posted: 23 June 2011 04:28 PM

    Thought this was worth sharing.  I’m sure that Brian White would agree (Ticonderoga Securities Analyst).  I 2012 sure looks like it could be a stellar year!

    Apple: China Mobile iPhone ?Imminent,? Says Ticonderoga

    Folks, it?s time for a mid-afternoon update on the situation as regards Apple?s (AAPL) iPhone and China, as seen from the perspective of Ticonderoga Securities analyst Brian White.

    White, as I mentioned earlier, today seized upon rumors of Apple COO Tim Cook visiting China this week to argue that Apple may be close to a deal to bring the iPhone to China?s China Mobile (CHL), the world?s largest carrier by customers.

    He?s got another clue: ?Today, the Chinese Character website Bianews.com reported that one of China Mobile?s employees posted a weibo message (i.e., the Chinese equivalent of ?twitter?) that indicated China Mobile will introduce the iPhone 5 in September,? observes White.

    White notes that the weibo message was quickly deleted but Bianews.com captured an image of the message and posted it.

    ?We believe an agreement between Apple and China Mobile is imminent,? concludes White.

    If this weibo message and story are true, this would represent a landmark agreement for Apple, providing the company with access to the largest wireless carrier in the world with 611 million wireless subscribers at the end of May or 68% of the total China wireless market. Additionally, the timing would be much sooner than expected and provide another growth driver for the final months of CY11.

    He thinks an iPhone 5 this September might need to support China?s home-brewed ?TD-SCDMA? standard, as the emerging protocol for 4G wireless, ?4G TD-LTE? is not yet ready for prime time.

         
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    Posted: 23 June 2011 04:42 PM #1

    Makes no sense at all because everyboxy knows theres not many people living in China and eve. If there were they wouldnt want any Apple products.  Tim Cook?—on vacation! Rumor debunked

         
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    Posted: 23 June 2011 04:49 PM #2

    Pure speculation based on a fuzzy photo of allegedly the back of Tim Cook + a single tweet. CHL stock spiked up over 3% on this “news”. Think that had anything to do with the rumors?

    The real reason Apple will release iPhone 5 in the Fall is because that is when iOS 5 will be released. Steve is not going to release a new iPhone that needs to be connected to a computer once he’s announced the “PC-Free” feature.

         
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    Posted: 23 June 2011 04:53 PM #3

    Don’t want to question a pro analyst because we know they are always right, but when Qualcomm announced their new chipsets which could support TD SCDMA and TD LTE they said sampling 2nd half 2011 and production early 2012.  The 28NM process is new so I sure there was some scheduling ambiguity in Feb, but Sep mass production is a pipe dream IMO.  Maybe 1st qtr 2012.  How about China Mobile launch for China’s gift giving in the new year.

    Qualcomm TD-SCDMA chipset

         
  • Posted: 23 June 2011 04:53 PM #4

    Drew Bear - 23 June 2011 07:49 PM

    Pure speculation based on a fuzzy photo of allegedly the back of Tim Cook + a single tweet. CHL stock spiked up over 3% on this “news”. Think that had anything to do with the rumors?

    The real reason Apple will release iPhone 5 in the Fall is because that is when iOS 5 will be released. Steve is not going to release a new iPhone that needs to be connected to a computer once he’s announced the “PC-Free” feature.

    Guess you didn’t read the article, not that this is concrete either, but it sounds legit.

         
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    Posted: 23 June 2011 05:19 PM #5

    Mikedmvp - 23 June 2011 07:53 PM

    Guess you didn’t read the article, not that this is concrete either, but it sounds legit.

    I did read the article, but it doesn’t present any evidence that an agreement is imminent. That rumor has been around for years. It’s like the VeriPhone rumors from 2008 through 2010. It will eventually come true.

    Even if they do reach an agreement of some sort, do you really think it will be for iPhone 5 this September? Apple is going to launch their flagship device on infrastructure that is limited to a small fraction of the Chinese population?

    I’d rather Apple sell a cheap iPhone 3GS running on China Mobile’s 2G network. That is a better stop-gap measure while they wait for the 3G networks to be more widely deployed. Slow internet access is better than nothing.

         
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    Posted: 23 June 2011 05:44 PM #6

    Drew Bear - 23 June 2011 08:19 PM
    Mikedmvp - 23 June 2011 07:53 PM

    Guess you didn’t read the article, not that this is concrete either, but it sounds legit.

    I did read the article, but it doesn’t present any evidence that an agreement is imminent. That rumor has been around for years. It’s like the VeriPhone rumors from 2008 through 2010. It will eventually come true.

    Even if they do reach an agreement of some sort, do you really think it will be for iPhone 5 this September? Apple is going to launch their flagship device on infrastructure that is limited to a small fraction of the Chinese population?

    I’d rather Apple sell a cheap iPhone 3GS running on China Mobile’s 2G network. That is a better stop-gap measure while they wait for the 3G networks to be more widely deployed. Slow internet access is better than nothing.

    I think China mobile has plenty of 3G coverage just not many subscribers due to the lack of compeling handsets.  Now that Qualcomm will offer a chipset which supports multiple standards including TD SCDMA and TD LTE, the design of a china mobile handset is much easier for Apple so they can enter the market when they sufficient chipsets to meet expected demand.  The handset if one exist will most likely match the iPhone 4 or 5 except for the RF baseband since that would simplify testing.  I would think Apple could offer any of the technology of the 3GS, 4 or 5, it sort of depends on what China Mobile wants.

         
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    Posted: 23 June 2011 05:54 PM #7

    pats - 23 June 2011 07:53 PM

    Don’t want to question a pro analyst because we know they are always right, but when Qualcomm announced their new chipsets which could support TD SCDMA and TD LTE they said sampling 2nd half 2011 and production early 2012.  The 28NM process is new so I sure there was some scheduling ambiguity in Feb, but Sep mass production is a pipe dream IMO.  Maybe 1st qtr 2012.  How about China Mobile launch for China’s gift giving in the new year.

    pats, do you have any info on how widely deployed this network will be by next year? Even if Apple had the phone ready, would China Mobile have the network ready? I know Wiki isn’t always the best source, but here’s what they say:

    “As of 2010 97% of China Mobile subscribers used its 2G services. Its 3G network, still under construction in 2010, utilizes the TD-SCDMA standard, which China Mobile helped develop.”

    Just as there are iPhones running on T-Mobile’s 2G network, there are already iPhones running on China Mobile’s 2G network.

    Even though the iPhone is not officially available on China Mobile’s network, one estimate this year said that 4 million iPhone users are on the massive network.

    China Mobile currently uses home-grown 3G data technology that is incompatible with the existing GSM and CDMA iPhone models. Because the current iPhone models are not compatible with China Mobile’s 3G network, and must run at much slower 2G speeds.

    http://www.appleinsider.com/articles/11/06/22

         
  • Posted: 23 June 2011 06:11 PM #8

    pats - 23 June 2011 07:53 PM

    Don’t want to question a pro analyst because we know they are always right, but when Qualcomm announced their new chipsets which could support TD SCDMA and TD LTE they said sampling 2nd half 2011 and production early 2012.  The 28NM process is new so I sure there was some scheduling ambiguity in Feb, but Sep mass production is a pipe dream IMO.  Maybe 1st qtr 2012.  How about China Mobile launch for China’s gift giving in the new year.

    Qualcomm TD-SCDMA chipset

    That timing sounds like it’s a perfect fit.  IMO they would never release iPhone 5 on China Mobile at the same time they do the US and the usual months-long worldwide rollout.  But 3-5 months post-Sept launch, “juice” the sales with a follow-on release on China Mobile.  Sounds like Apple-style planning to me having watched their other rollouts.

         
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    Posted: 23 June 2011 06:25 PM #9

    Drew Bear - 23 June 2011 08:54 PM
    pats - 23 June 2011 07:53 PM

    Don’t want to question a pro analyst because we know they are always right, but when Qualcomm announced their new chipsets which could support TD SCDMA and TD LTE they said sampling 2nd half 2011 and production early 2012.  The 28NM process is new so I sure there was some scheduling ambiguity in Feb, but Sep mass production is a pipe dream IMO.  Maybe 1st qtr 2012.  How about China Mobile launch for China’s gift giving in the new year.

    pats, do you have any info on how widely deployed this network will be by next year? Even if Apple had the phone ready, would China Mobile have the network ready? I know Wiki isn’t always the best source, but here’s what they say:

    “As of 2010 97% of China Mobile subscribers used its 2G services. Its 3G network, still under construction in 2010, utilizes the TD-SCDMA standard, which China Mobile helped develop.”

    Just as there are iPhones running on T-Mobile’s 2G network, there are already iPhones running on China Mobile’s 2G network.

    Even though the iPhone is not officially available on China Mobile’s network, one estimate this year said that 4 million iPhone users are on the massive network.

    China Mobile currently uses home-grown 3G data technology that is incompatible with the existing GSM and CDMA iPhone models. Because the current iPhone models are not compatible with China Mobile’s 3G network, and must run at much slower 2G speeds.

    http://www.appleinsider.com/articles/11/06/22


    It is difficult to find real detail.  China Mobile is basically state run and so any failure like the TDSCDMA standard will not make the press.  My understanding is they are trying to move rapidly to 4G using TD LTE which will also be used in India.  They continue to build out 3G but IMO they will jump to 4G as soon as feasible so they can claim a technology triumph.  Having the Apple handset on their new network will place them as an equal so I would think it will happen.  As far as 3G Apple already support China Unicom, and I thought China Telecom was next using CDMA, but now maybe the China Mobile politics will mean they are next.

    Here is old article on China Mobile’s 3G rollout where they claim subscribers and network usage was increasing past 2G in key cities.

    http://www.shanghaidaily.com/sp/article/2010/201011/20101130/article_455939.htm

         
  • Posted: 23 June 2011 07:54 PM #10

    You all make good points.  After reading as much information on the subject that is available, it is hard for me to believe that Apple will release an iPhone 5 in the US in September and then also release it in China in September.  Just the initial amount of units it would have to produce would need to be staggering.  It would sure make for an amazing finish to 4Q2011 and 1Q2012 would be off the charts.

    I haven’t found anything that would confirm that Apple has the chip compatible with their new network, only that there is an estimated 4M iPhones currently being used on their network.  It will be interesting to see if anyone digs up a chip that is compatible in the next couple of weeks.

         
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    Posted: 23 June 2011 10:13 PM #11

    Mike, I will go out on a limb and say right now that there will not be a Sept launch of an iphone 5 in China. Just getting the rest of the countries online will be a chore. This is fine though because a Jan/Feb launch for CM would keep Apple/AAPL chugging right along. I still maintain that it is not a delay, just a rescheduling of events. Also launching a new handset so soon after the VZ launch would have marginalized a bunch of VZ customers, bad PR IMO. There are numerous reasons to have the ipad and iphone staggered 6 months apart.

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  • Posted: 24 June 2011 12:40 AM #12

    Mikedmvp - 23 June 2011 10:54 PM

    You all make good points.  After reading as much information on the subject that is available, it is hard for me to believe that Apple will release an iPhone 5 in the US in September and then also release it in China in September.  Just the initial amount of units it would have to produce would need to be staggering.  It would sure make for an amazing finish to 4Q2011 and 1Q2012 would be off the charts.

    I haven’t found anything that would confirm that Apple has the chip compatible with their new network, only that there is an estimated 4M iPhones currently being used on their network.  It will be interesting to see if anyone digs up a chip that is compatible in the next couple of weeks.

    I expect within 90 days following release of the iPhone 5 (production permitting) unit sales will reach 30 million without China Mobile as a factor. AT&T and Verizon are hungry for the new phone and consumers will have a big appetite for the new device.

    China Mobile will come in time and that deal will have a dramatic impact on the share price. We have yet to see anything near the scale of unit sales the iPhone 5 will reach in the first six months as the flagship product.

         
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    Posted: 24 June 2011 12:56 AM #13

    DT, when I hear that Foxxcon is building another factory in China I will know that the deal has closed. I believe there will be an A5 chip constraint for 3-4 qtrs which will mean massive demand.

    To echo what we discuss often, the two biggest words for Apple are Steve Jobs. The two biggest words for AAPL are China Mobile.

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  • Posted: 24 June 2011 08:56 AM #14

    An iPhone storm is brewing.  Here is the latest update and it looks mighty positive.  This might help Apple sustain its 97% YOY growth…

    The deal went through and the new device will ship in September, the Shanghai News (via Reuters) claimed, quoting Liu Yang, the firm’s marketing official,

    “A new iPhone with China Mobile’s network will debut and the cooperation will be announced in September,” Yang wrote on his micro-blog. However, Apple and China Mobile now seem to be in damage control mode, refusing to confirm or deny these claims.

    As previously reported, the combined GSM/CDMA worldphone iPhone 5 seems set to be twice as fast as the current generation, equipped with an A5 processor, 8-megapixel camera, a much-improved flash function, and an improved display.

    Supposedly, this will support 4G, though I have my doubts…

         
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    Posted: 24 June 2011 09:33 AM #15

    How badly will this hurt sales of iPhone4 in the Sept quarter?