{"id":45256,"date":"2013-12-11T08:01:23","date_gmt":"2013-12-11T13:01:23","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=45256"},"modified":"2013-12-11T08:01:23","modified_gmt":"2013-12-11T13:01:23","slug":"apple-finally-takes-step-will-bring-company-next-level","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/12\/11\/apple-finally-takes-step-will-bring-company-next-level\/","title":{"rendered":"Apple Finally Takes Step That Will Bring the Company to the Next Level"},"content":{"rendered":"

By George Leong, B.Comm.<\/a><\/span><\/strong><\/p>\n

Just last Thursday, Apple Inc. (NASDAQ\/AAPL) revealed its long-awaited and worst-kept secret when the maker of the \u201ciPhone\u201d and \u201ciPad\u201d reported it would align with China Mobile Limited (NYSE\/CHL) to push its products into China, a very lucrative market for the smartphone giant.<\/p>\n

The deal, while somewhat newsworthy, was not a bug surprise to the markets, as evidenced by the stock slightly edging upward by a little more than three percent on the news.<\/p>\n

Now, you may be wondering why the stock market<\/a> simply shrugged at the news, given that China Mobile is the biggest mobile deliverer in the world, with about 730 million subscribers.<\/p>\n

Obviously, that\u2019s a huge number of potential buyers and added revenue channels for Apple. But the deal really doesn\u2019t mean Apple will be going back to its previous high above $700.00, reached in September 2012. The reality is that Apple needs to be able to find Chinese buyers for its somewhat expensive (or overpriced) smartphones and tablets.<\/p>\n

The target market is there, and it\u2019s probably closer to about 300 million people or so, based on the number of middle-class consumers in China. The reason I see its potential market base being much smaller than China Mobile\u2019s subscriber base is simply due to the company\u2019s product pricing. I really don\u2019t think some shopkeeper or farmer in rural China is going to dole out a major portion of their annual wages to snap up a snazzy \u201ciPhone 5C\u201d or \u201c5S.\u201d This will be the main dilemma Apple will face in this market.<\/p>\n

The problem at the very root of this dilemma is that Apple will need to shift its margins to address the prohibitive cost of its phones when considering the mass of Chinese consumers earning average wages.<\/p>\n

China Mobile may decide\u00a0to subsidize the iPhones for buyers, as we have seen here with the zero-cost 5C with the signing of a contract in more recent weeks. With the cost to make an iPhone 5C at around $190.00, it\u2019s really not a big deal for China Mobile to subsidize its phones, given that the majority of the company\u2019s revenues are made through its monthly mobile fees anyway.<\/p>\n

So for Apple to really push into China and increase its market share from its current five percent or so, the company\u2019s success will lie squarely on the price point of its phones.<\/p>\n

Apple has traditionally made money from selling its phones, so if the company were to make these major price cuts in China, it would be a divergence from its normal policy. But if the company wants to be the next Samsung Electronics Co. Ltd., LG Corporation, HTC Corporation, or Nokia Corporation (NYSE\/NOK) in China and the emerging markets, aggressive pricing will be required for Apple to succeed and reward investors.<\/p>\n

Of course, there is more than one way that investors interested in the mobile market can get in on the action without having to invest directly in phone makers like Apple. Read \u201cHow to Profit from the Mobile Market Without Investing in Phone Makers<\/a>\u201d for more.<\/p>\n

\n

This article Apple Finally Takes Step That Will Bring the Company to the Next Level<\/a> is originally publish at Profitconfidential<\/a><\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By George Leong, B.Comm. Just last Thursday, Apple Inc. (NASDAQ\/AAPL) revealed its long-awaited and worst-kept secret when the maker of the \u201ciPhone\u201d and \u201ciPad\u201d reported it would align with China Mobile Limited (NYSE\/CHL) to push its products into China, a very lucrative market for the smartphone giant. The deal, while somewhat newsworthy, was not a … <\/p>\n

Continue reading “Apple Finally Takes Step That Will Bring the Company to the Next Level”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-45256","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/45256","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=45256"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/45256\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=45256"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=45256"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=45256"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}