Apple's (AAPL) iPad Mini, iPhone 5 Will Sell Like Hotcakes in China - Analyst
Apple (Nasdaq: AAPL) shares continue to be pressured Friday amid an announcement earlier that it was bringing its iPhone 5, iPad mini, and iPad 4 to China in December.
Topeka Capital thinks that China will be big for Apple for a few key reasons:
Finally, Topeka picked up some numbers from Analysys Research, showing that the China tablet market has reached about 2.6 million units with Apple holding onto a 71 percent market share. In addition, research firm Canalys estimates 50 million smartphones shipped to China through the third quarter, with Apple garnering an 8 percent market share.
Apple is down 0.9 percent in late trading Friday. Topeka rates Apple at Buy, with a price target of $1,111.
Topeka Capital thinks that China will be big for Apple for a few key reasons:
- The new iPhone 5 will appeal for the "status" factor. Many in China did not upgrade to the iPhone 4S from iPhone 4 because the form factor was largely the same. Additionally, 3G subs in China grew 93 percent over last year to about 212 million, with total wireless subs approaching 1.1 billion.
Topeka notes that although it expected the iPhone 5 in China by December, total rollout seems to be slower than other devices. The iPhone 5 is currently in 47 countries, but the iPad mini and iPad 4 are already available in 42 countries.
- The iPad mini and iPad 4 (collectively "iPads") will be available on December 7th, which is a shocker to Topeka. The firm didn't see the iPads making a debut in China until the first quarter of 2013. Apple generated about 15 percent of total sales from Mainland China, Taiwan, and Hong Kong last year. Given that the Chinese New Year is in February, Apple wanted to have product on shelves when buying begins in January.
- Topeka thinks that the iPad mini is going to be a smash hit. Based on checks the firm has performed, Samsung's Galaxy Note appears to be making a splash with the consumer base. Based on discussions in meetings and casual conversations on trips to China, the firm believes iPad mini volumes will be "meaningful" to Apple. The devices is priced less thn the new Samsung Galaxy Note II, which will add to appeal.
Finally, Topeka picked up some numbers from Analysys Research, showing that the China tablet market has reached about 2.6 million units with Apple holding onto a 71 percent market share. In addition, research firm Canalys estimates 50 million smartphones shipped to China through the third quarter, with Apple garnering an 8 percent market share.
Apple is down 0.9 percent in late trading Friday. Topeka rates Apple at Buy, with a price target of $1,111.