Apple recently announced that it had reached an agreement with China’s #2 mobile phone carrier, China Unicom, to distribute iPhones in China (legally) by Q4 2009. China Unicom has over 140 million subscribers within the 700 million subscriber Chinese mobile phone market.
We estimate that Apple will have about 3.1% share within the 1.2 billion unit Global Mobile Phone Market in 2010 implying 38 million iPhones sold that year. The majority of unit sales will come from North America (~45%) and Western Europe (~25%). We believe Apple will sell approximately 2.8 million iPhones in China in 2010 (equivalent to 2% of China Unicom’s current subscriber base). In comparison, third-party estimates of China iPhones sales in the first year range from around 1 million (UBS) to 7 million (Broadpoint AmTech). Additionally, the media has reported that China Unicom has already paid Apple for 5 million iPhones although the delivery timeline for the purchased phones remains unclear.
Unlike Apple’s deal with AT&T in the US, the China Unicom deal is not exclusive and leaves open the possibility that Apple may also be able to enter the Chinese market through China Mobile which has 500 million subscribers. We believe that there could be additional updside to our forecast based on the size of the Chinese market, the existing demand for iPhones (over 1 million illegal iPhones in use) and Apple’s success in China with the iPod.
Apple’s iPhone business constitutes 54% of the $193 per share Trefis estimate for Apple’s stock. Within Apple’s content on our platform, you can see how an increase in iPhone Market Share
would impact Apple’s stock (each 0.5% of market share gained by Apple translates to 6 million iPhones sold).
