Apple, China Mobile Open Door To Advertising Market
Apple reached a multiyear deal with China Mobile to sell the company's iPhone devices. Analysts see the deal as a massive new opportunity for U.S. brands wanting to reach consumers in China.
China Mobile supports about 760 million subscribers. Apple plans to release iPhone pricing details at a later date, but financial terms of the deal were not disclosed.
The appetite for Apple products in China continues to grow with its active user Internet base of more than 500 million, giving brand marketers an opportunity to connect. The country represents the world's largest consumer market with a population of 1.3 billion.
Trip Chowdhry, managing director at Global Equities Research, said Apple could drive between 70% and 80% of the Internet traffic in China, similar to its dominant
role in the United States.
"Apple's 'i' devices could become the primary source for Chinese consumers to interact and connect with ecommerce sites on the Internet," Chowdhry said. "We see it in the U.S., where about 80% of the Internet traffic is driven through Apple ID devices."
Armed with several tips for 2014, Chowdhry suggests that brands that want to support the Chinese market should create applications aimed at local consumers to drive product interaction. Brands should also build integration with Passbook as well as iBeacon, an indoor positioning system containing Bluetooth Low Energy technology estimated in about 200 million iOS devices. Apple positions iBeacon as a low-powered, low-cost transmitter that can notify nearby iOS 7 devices.
Apple could sell 17 million iPhones to run on the China Mobile network in 2014, adding 5% to street revenue estimates, per Gene Munster, senior research analyst at Piper Jaffray. "In terms of our 17 million first-year iPhone sales estimate, we note that the iPhone made up 6% of total smartphone sales in China in Q3-13," he wrote in a research note.