Source – mercurynews.com
By – Steve Johnson
Category – Hotel Website Designing Florida
Apple’s (AAPL) stock price Thursday initially rocketed toward record territory for the year, partly on a report that it had finally reached a deal to sell iPhones through China Mobile. But the shares lost steam after an official with the Chinese company said the two firms were still negotiating. The Wall Street Journal, quoting what it called “a person familiar with the situation,” said Apple and China Mobile had signed an agreement to sell the phones on the Chinese company’s network, the world’s biggest carrier with more than 700 million subscribers. The story added that the deal was in anticipation of China Mobile’s Dec. 18 launch of its fourth-generation network.
However, Reuters disputed that report, quoting China Mobile spokeswoman Rainie Lei, who said, “we are still negotiating with Apple, but for now we have nothing new to announce.” Apple spokeswoman Teresa Brewer declined to comment. The Cupertino consumer electronics giant typically announces major new deals with telecom carriers. At one point Thursday, Apple’s shares hit $577.25. If they had closed at that price, it would have been the stock’s highest level since Nov. 6 last year. But the shares eventually closed at $567.90, an increase from the previous day of $2.90 or about half a percent. Part of the stock’s rise had been attributed to plans by billionaire Apple investor Carl Icahn to pressure Apple’s board to buy back $50 billion worth of its stock. Such buybacks typically benefit shareholders by boosting the stock’s price. But Wall Street was especially intrigued by news that a deal with China Mobile — if not actually signed — might be imminent after several years of negotiations between the two companies.
Millions of people who have bought iPhones from black-market and other sources already use China Mobile’s network. Nonetheless, analysts say Apple’s sales would increase substantially if the phone was offered directly by the giant carrier, especially if China Mobile subsidized the iPhone’s price or it was discounted by Apple to make it more affordable for Chinese customers.Pacific Crest Securities analysts estimated Thursday that Apple could sell up to 15 million more iPhones a year and see its stock price rise to $585 if it reached a deal with China Mobile. Apple shipped a total of 135.8 million iPhones in 2012, making it the second-biggest smartphone vendor behind Samsung, which shipped 213 million, according to Strategy Analytics. Analysts at Deutsche Bank Securities were even more upbeat. In a note to their clients Thursday, they predicted such a deal would enable Apple to sell 20 million more iPhones within a year and boost Apple’s shares to $625, adding that “China Mobile represents a significant, largely untapped market opportunity.”
Finally reaching an agreement with China Mobile would be “a positive development” for Apple, said Alex Gauna of JMP Securities. But he remained cautious about the prospects for a deal, noting that as of Thursday, the carrier was promoting eight Android phones on its website but didn’t mention the iPhone. John Bright, an analyst with Avondale Partners, said he considers it likely that China Mobile eventually will offer the iPhone on its network, because its customers will want that. But while such a deal also “is a strategic must” for Apple, it’s unclear how much the Cupertino company would benefit, he said, because it depends on whether Apple would have to discount the iPhones price or offer other incentives that might cut into its revenue.