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Addition of China Telecom Could Double iPhone Market in China (AAPL)

January 10, 2012 12:54 PM EST
AAPL Hot Sheet
Rating Summary:
    49 Buy, 5 Hold, 0 Sell

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    Up: 19 | Down: 18 | New: 27
Reports from GIGAOM Tuesday suggest Apple (Nasdaq: AAPL) has the potential to double iPhone sales in China. The call follows chatter from Monday which rumored the China Radio Management Office has given clearance to an iPhone for China Telecom's (NYSE: CHA) CDMA2000 network.

China Telecom would be the second company in China to carry the iPhone behind China Unicom. GIGAOM suggests adoption by China Telecom could add some 33 million mobile subscribers to the market. The blog also points to a chance Apple and the carriers could gain back sales from the gray market as people would be able to purchase the iPhone directly from a legit provider.

China Unicom and China Telecom are currently the second- and third-largest carriers, respectively, in China.

As China Telecom currently uses a similar network standard as Verizon’s (NYSE: VZ) mobile 3G network in the U.S, Apple would be able to enter the network without much of effort or additional expenses.

China will ultimately prove to be one of Apple’s strongest markets due to the nation's large population and citizen's image of the company. Playing to this theme, management at Apple recently made available the use of Chinese currency at its Chinese App Store.


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