Chang Xiaobing
The official release on China Unicom’s website was did not disclose deal terms other than a 3-year timeframe and an iPhone launch slated for the 4th quarter…
“On 28 August, the Company and Apple reached a three-year agreement for the Company to sell iPhone in China. The initial launch is expected to be in the fourth calendar quarter of 2009. This will provide users with brand new communication and information experience.”
Coincidently, DoNews in China reports that a special iPhone for China (Model A1324?) received its network access license (NAL) today (August 28, 2009).
Sohu.com reports that China Unicom’s iPhone deal is an “exclusive.” However, most importantly, no such words (“exclusive”) were uttered by China Uincom executives during today’s press briefing. And the word “exclusive” is also missing from the press release on China Unicom’s website. This is key as the door may be open for Apple to negotiate additional carrier deals in China, most notably with with China Mobile.
There were no details (e.g. quantity or price) provided today over China Unicom’s bulk iPhone purchase. However, earlier in the month, loose-lipped executives from Guongdong Unicom reported that China Unicom would pre-purchase 5,000,000 iPhones from Apple for $1.46 billion USD.
The delay in iPhone launch until the 4th quarter will afford China Unicom more time to complete their WCDMA 3G network build-out. A 4th quarter launch will also allow sufficient time for the second iPhone for China (A1325), now in the approval pipeline, to complete its CTTL testing and to obtain a network access license. As many iPhonAsia readers know, I believe this model will be based on the iPhone 3GS and that it may include WAPI and possibly WAPI/WiFi. More on > WAPI/WiFi
So how will iPhone do in China? First let me disclose that I am an Apple (AAPL) shareholder and while I try to be objective, I am inclined to be more optimistic than many Street soothsayers. In an interview (English version) with China’s MobinodeTV last month, I projected that Apple will sell upwards of 14 million iPhones in China within the first 12 months of a formal launch.
Other analysts have been (*cough* out to lunch) “more cautious” with their forecasts. UBS analyst Maynard Um projects that there could be an “upside” of 1 million iPhone unit sales for Apple in the fiscal year for 2010 (which ends in September). Sanford C. Bernstein & Co analyst Toni Sacconaghi calculates that Apple can sell 2.9 million iPhones in China by the end of 2011.
Um… Maynard and Toni… your iPhone sales projections in China may be just a tad too low! It’s entirely possible that the 5,000,000 iPhone pre-buy will prove to be true, and this would immediately blow-away your tepid numbers. Moreover, all of the China iPhone(s) marketing and distribution expenses will apparently be borne by China Unicom.
Brian Marshall & Gene Munster
Several analysts are more optimistic and see the China market as a big win for Apple. Piper Jaffray’s Gene Munster was on CNBC today, and while he did not offer up specific sales numbers for China, he did suggest that many analysts’ iPhone sales projections were going to prove to be too conservative and that we might soon be at an inflection point… “We [Piper Jaffray] believe that iPhone will essentially go vertical, in terms of demand, in the next year, and we think that’s going to surprise analysts.”
Broadpoint AmTech analyst Brian Marshall was also on the same CNBC interview (see video below). Marshall believes that iPhone is now… “starting to penetrate the enterprise … typically it has been a consumer device, but we [Broadpoint AmTech] think it’s the trojan horse for Apple to enter the enterprise, and people in corporate environments will say, hey, instead of supporting my Blackberry, I want you to support my iPhone as well … and while you’re at it, please support my MacBook Pro.”
In a separate interview, Brian Marshall weighed in on iPhone in China. According to Marshall … “The Chinese market will account for about 15% to 20% of Apple’s worldwide iPhone sales next year.” Marshall notes that approximately 50% of China Unicom’s customers are post-pay (on contract). Post-pay customers can take advantage of the subsidy that China Unicom will offer to iPhone buyers. Marshall explains … “With 70 million post-paid customers, and assuming flat sales, which are conservative, I think Apple will sell between five and seven million iPhones in China during 2010.” He projects that Apple will sell 37 million iPhones worldwide in 2010.
[...] may recall the confusion over “exclusivity” that followed the August 28th iPhone deal announcement by China Unicom. There was no mention of an “exclusive deal” in the official release on [...]