(By Balaseshan) Apple Inc. (NASDAQ: AAPL) is reportedly accessing the massive subscriber base in China as Chief Executive Officer Tim Cook and China Mobile's Chairman Xi Guohua met Thursday and discussed "cooperation".
Cook made his second visit to China in less than a year as the technology behemoth is trying to revive its sliding market share in the world's biggest smartphone market.
"In the morning, Apple's CEO Tim Cook visited China Mobile's headquarters. China Mobile's Chairman Xi Guohua and Tim Cook discussed matters of cooperation," the Reuters reported, quoting China Mobile spokesman Li Jun as saying.
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China Mobile declined to reveal further details, citing a confidentiality agreement.
A deal between Apple and China Mobile could double the sales of iPhone in China, the world's most populous country, istockanalyst had noted in November.
China Mobile is the largest mobile operator in the world, with 699 million subscribers and 75.6 million 3G customers. China Mobile with its nearly 700 million subscribers is the largest carrier in China with 65% market share, followed by China Unicom (21%) and China Telecom (14%).
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Apple will open more retail shops in China, which will eventually become its biggest market, the Xinhua reported citing Cook as saying. The Cupertino giant is striving with relevant Chinese parties to cut the delay in introducing new products.
"We estimate that 10–16M iPhones could be sold to China Mobile subscribers within the first 12 months of availability," RBC Capital Markets analyst Amit Daryanani wrote in a client note on November 9, 2012. "The biggest hurdle continues to be subsidy agreements with the carrier."
The analyst estimates that the addition of China Mobile would add about $3-plus to Apple's annual EPS or $45 to AAPL stock price.
Daryanani expects that Apple could generate incremental EPS in a range of $2.50 to $3.50 for the first full 12 months with China Mobile. He believes Apple can continue to gain share in the future, about 100–200bps on an annual basis, as it can partner with China Mobile and China's subscriber base moves from largely 2G today to 3G and over time to 4G.
AAPL is trading up 0.21% at $518.18 on Thursday. The stock has been trading between $418.66 and $705.07 for the past 52 weeks.