A few thoughts on Apple (
) and for a few additional thoughts surrounding the deal be sure to
check out my tweets (
) from last night.
[caption id="attachment_58439" align="alignright" width="300"]
The Apple store in Shanghai[/caption]
Apple will open around $567, +3% from Fridays close. The
stock needs to take this good news through $575 quickly or it will
fade. There is heavy congestion from the December 5 $575 6 month
high right at this level where it will open.
Why could it fade?
Well because to move Apple's stock you need more than the
expectation that accessing China will be the next level of
You need real institutional follow through in the name to move
$500 billion in market cap, which in turn may need to see real
sales numbers and growing market share.
Apple is a distant 4th in the China handset race. And
let's be clear, Apple has already had access to roughly 450 million
subscribers already in China via China Telecom (
) and Unicom (
Already this is a greater number of subs than the entire US
market. Clearly there have been limitations to the Apple
offering for these other major players.
Underwriting the Apple hardware has been an expensive
proposition and has been a loss leader for the other Chinese
operators. Here are some core numbers related to the deal and how
Wall Streets top analysts view the impact:
- Sales begin Jan 17th ( in
time for Chinese New Year's) …Giddy-UP
- Can pre-register for
iPhone starting Dec 25tth
- China Mobile has approx.
181m "3G or better" subs currently
- Street seems to be
somewhere between 12-24m annual shipments and 4-7% EPS boost
- Seasonally weak March qtr.
may include China mobile ramp after seasonally best qtr.
- Diminishes shorter term
bearish technical set-up in moving averages
- Street says Apple should
trade between 12-15X '14 EPS of around $45-60 share