Boston, MA 12/19/2013 (wallstreetpr) – Apple Inc. (NASDAQ:AAPL) is in the hot seat as discussions on how the company would soft-pedal its $500 iPhones – if and when subsidies are withdrawn- now begins to surface on every forum. Another aspect that is under wild discussion is the Chinese market and the –‘no’ deal with China Mobile, which would mean no subsidies either!
Subsidies and High-cost data plans
In the U.S., Apple Inc. (NASDAQ:AAPL) has traditionally sold its iPhones through the four major network carriers in the country. AT&T, Sprint, Verizon and T-Mobile each offer various options for iPhone buyers. With data plans costing as less as $99, against an MRP of $500 plus, is not just attractive but nearly laughable. The carrier will sign-up the buyer on a 2-year contract, on the completion of which the buyer comes to own the iPhone.
Therefore, Apple Inc. (NASDAQ:AAPL) had no hassle in selling out under a million to its U.S. customers by the time of launch of their devices.
However, as network carriers confer with the government on unlocking cell phones, talks of subsidies being given a miss too have surfaced.
China Mobile is not in yet
High expectations that the Chinese government owned carrier China Mobile, would announce an iPhone deal, continue to make the rounds. Even analyst firms- Wells Fargo- highlight that China Mobile management have announced that they would welcome another 15 million iPhones, by 2014, considering the fact that they already have 50 million iPhone users on its network.
Another analyst, BMO says that with China Mobile poised to add over 100 million 4G devices by 2014, and maybe Apple Inc. (NASDAQ:AAPL) should either become co-participant in the venture, much like Qualcomm’s likely participation.
Subsidies or no subsidies, iPhones will continue to be sold, in the U.S. and worldwide. However, the numbers of handsets sold would definitely change drastically in a post-subsidies market.