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China Telecom to start selling iPhones next month
By Zhu Shenshen |
February 21, 2012, Tuesday
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Online Edition
Online Edition
CHINA Telecom today announced it will start selling Apple Inc's iPhone 4S on the Chinese mainland from next month, making it the second mobile carrier to offer the product in the world's No. 1 mobile phone market.
A new carrier partner will help Apple increase distribution channels and further boost sales in the market with more than 900 million handset users, analysts said.
It will also help China Telecom, the No. 3 mobile carrier in China, to catch up with bigger rivals China Mobile and China Unicom in the high-end market, though it's expected to erode China Telecom's short-term profit because of a high subsidy for the phone.
China Telecom will start by offering the iPhone 4S with the support of its code division multiple access (CDMA) network on March 9. Users who commit to a two-year contract can get a free 16-gigabyte iPhone 4S with a service plan costing 389 yuan (US$62) a month. A three-year plan cuts the monthly minimum to 289 yuan, the carrier said today.
The carrier will reveal more details and accept orders from March 2.
"Adding new carriers is the biggest driver of shipments for Apple (in China),"
Morgan Stanley's analyst Katy Huberty said in a recent note.
The China Telecom's agreement will bring Apple two to four million new iPhone users next year.
China Unicom, which is now the sole carrier partner of Apple on iPhone, offered iPhone in October 2009 and began selling the iPhone 4S in January. The carrier never reveals its iPhone user base, but it's estimated to sell about 3 million iPhones this year.
"iPhone 4S has been an incredible hit with customers around the world. We're thrilled to be launching iPhone 4S with China Telecom and can't wait to get it into the hands of even more customers in China," Apple China said in a statement.
Since January, Apple has only sold iPhones online for "security concerns" after too many people flooded into local stores in Beijing and Shanghai for the new iPhone 4S.
In January, China saw a 1.2 percent monthly increase in the total number of mobile subscribers to 987.58 million, the operators said today.
By the end of last month, China Unicom, the No. 2 carrier, said its mobile subscribers had risen to 202.89 million, including 43.07 million 3G subscribers. Mobile subscribers at China Telecom increased to 129.25 million including 38.7 million for 3G subscribers.
In the long term, China Telecom lacks competitive models for its CDMA networks, which has caused it to lag behind China Mobile and China Unicom.
The introduction of iPhone will change this situation, but will still increase profit pressure on the carrier, industry insiders said.
China Telecom will make an "appropriate increase in marketing initiatives in connection with iPhone sales" and it will bring "short-term pressure on its profitability," the HK-listed China Telecom said in a statement to the Hong Kong stock exchange today, without providing figures.
China Mobile, the country's No. 1 mobile carrier, is also expected to offer next-generation iPhones with a new technology standard "at the end of this year or next year," which is "upside to a bull case of 36 million incremental shipments in calendar year 2013," according to Morgan Stanley.
Apple was the fifth-largest smartphone vendor in China in the fourth quarter, with shipments of 2.08 million handsets, or 7.5 percent of the total. Samsung Electronics Co was the market leader with 24 percent, followed by Nokia Oyj, Huawei Technologies Co and ZTE Corp, according to Gartner Inc, a US-based IT consulting firm.
A new carrier partner will help Apple increase distribution channels and further boost sales in the market with more than 900 million handset users, analysts said.
It will also help China Telecom, the No. 3 mobile carrier in China, to catch up with bigger rivals China Mobile and China Unicom in the high-end market, though it's expected to erode China Telecom's short-term profit because of a high subsidy for the phone.
China Telecom will start by offering the iPhone 4S with the support of its code division multiple access (CDMA) network on March 9. Users who commit to a two-year contract can get a free 16-gigabyte iPhone 4S with a service plan costing 389 yuan (US$62) a month. A three-year plan cuts the monthly minimum to 289 yuan, the carrier said today.
The carrier will reveal more details and accept orders from March 2.
"Adding new carriers is the biggest driver of shipments for Apple (in China),"
Morgan Stanley's analyst Katy Huberty said in a recent note.
The China Telecom's agreement will bring Apple two to four million new iPhone users next year.
China Unicom, which is now the sole carrier partner of Apple on iPhone, offered iPhone in October 2009 and began selling the iPhone 4S in January. The carrier never reveals its iPhone user base, but it's estimated to sell about 3 million iPhones this year.
"iPhone 4S has been an incredible hit with customers around the world. We're thrilled to be launching iPhone 4S with China Telecom and can't wait to get it into the hands of even more customers in China," Apple China said in a statement.
Since January, Apple has only sold iPhones online for "security concerns" after too many people flooded into local stores in Beijing and Shanghai for the new iPhone 4S.
In January, China saw a 1.2 percent monthly increase in the total number of mobile subscribers to 987.58 million, the operators said today.
By the end of last month, China Unicom, the No. 2 carrier, said its mobile subscribers had risen to 202.89 million, including 43.07 million 3G subscribers. Mobile subscribers at China Telecom increased to 129.25 million including 38.7 million for 3G subscribers.
In the long term, China Telecom lacks competitive models for its CDMA networks, which has caused it to lag behind China Mobile and China Unicom.
The introduction of iPhone will change this situation, but will still increase profit pressure on the carrier, industry insiders said.
China Telecom will make an "appropriate increase in marketing initiatives in connection with iPhone sales" and it will bring "short-term pressure on its profitability," the HK-listed China Telecom said in a statement to the Hong Kong stock exchange today, without providing figures.
China Mobile, the country's No. 1 mobile carrier, is also expected to offer next-generation iPhones with a new technology standard "at the end of this year or next year," which is "upside to a bull case of 36 million incremental shipments in calendar year 2013," according to Morgan Stanley.
Apple was the fifth-largest smartphone vendor in China in the fourth quarter, with shipments of 2.08 million handsets, or 7.5 percent of the total. Samsung Electronics Co was the market leader with 24 percent, followed by Nokia Oyj, Huawei Technologies Co and ZTE Corp, according to Gartner Inc, a US-based IT consulting firm.
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