Apple (AAPL), China Mobile Deal Still Forthcoming, BMO Says; Deal Likely Before Chinese New Year
Bachman notes that China Mobile did say it plans to add ~100 million TD LTE handsets in CY2014, and deploy 500k LTE bay stations by the end of CY15. In addition, the analyst notes that historically Apple has not wanted to be a part of any broad announcements.
"Apple likes the spotlight," he said. "Since Apple has a phone that has been approved and qualified, we still think a joint announcement will be forthcoming."
In recent meetings with China Mobile, management commented that as many as 50 million iPhones were on the China Mobile network, including strong demand in CY4Q13, Bachman notes. "We continue to believe that China Mobile could add around 15 million iPhones in CY14. We note that in our recent meetings with all three Chinese carriers this month, they indicated that the high end of the smartphone market (4,000 RMB and above) would be around 15% of total 3G units in CY14."
Bachman said the later a potential deal with China Mobile is announced, the better for Apple's March quarter, for sell in. "We continue to believe that both China Mobile and Apple will want phones available for Chinese New Year (January 31)," he said.
The analyst maintained an Outperform rating and price target of $585 on Apple.
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