China Mobile (CHL) Pays Early Price in iPhone Deal (AAPL)
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Is Apple's (Nasdaq: AAPL) iPhone deal with China Mobile (NYSE: CHL) better for...Apple?
The WSJ noted that analysts have been cutting estimates on China Mobile since the deal was announced last month. Along with increased costs on subsidies and network roll out, the carrier is expected to now deal with lower interconnection fees from rivals following China's move to increase competition in the wireless segment.
Credit Suisse recently lowered its net profit outlook on China Mobile by 9.1 percent for 2014 and Mizuho Securities sees profit dropping 10 percent for the year. China Mobile is expected to spend about $876 million on subsidies alone this year.
China Mobile's large investment in its 4G rollout could lead to the first profit decline in 2013 since 1999.
Of course, the addition of the iPhone is a long-term investment for China Mobile as China consumers continue to see incomes rise.
Shares of China Mobile are lower in early trading Friday, while Apple is mostly positive.
The WSJ noted that analysts have been cutting estimates on China Mobile since the deal was announced last month. Along with increased costs on subsidies and network roll out, the carrier is expected to now deal with lower interconnection fees from rivals following China's move to increase competition in the wireless segment.
Credit Suisse recently lowered its net profit outlook on China Mobile by 9.1 percent for 2014 and Mizuho Securities sees profit dropping 10 percent for the year. China Mobile is expected to spend about $876 million on subsidies alone this year.
China Mobile's large investment in its 4G rollout could lead to the first profit decline in 2013 since 1999.
Of course, the addition of the iPhone is a long-term investment for China Mobile as China consumers continue to see incomes rise.
Shares of China Mobile are lower in early trading Friday, while Apple is mostly positive.
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