Sport & Auto
- About Future
- Digital Future
- Cookies Policy
- Terms & Conditions
- Investor Relations
- Contact Future
While neither company is popping the champagne just yet, rumors claim that Apple and China Telecom have reached a “preliminary agreement” that would bring not one, but two iPhones to the carrier this fall -- the iPhone 5 and a scaled-down iPhone 4.
AllThingsD is reporting that Apple has reached a “preliminary agreement” with China Telecom, the third largest carrier in China, following lengthy discussions between the companies. But the more interesting news is a report from Sohu.com that potentially reveals what Cupertino may have up its sleeve for October.
“According to Sohu.com, China Telecom will offer two types of iPhone that include the iPhone 5 and a ‘simplified iPhone 4,’” reveals Brian White, an analyst with Ticonderoga Securities. “Essentially, this potential ‘simplified iPhone 4′ would be a more economical version of iPhone to target a broader customer base in developing countries such as China, allowing for an expanded market opportunity.”
This isn’t the first time we’ve heard about this possibility -- recent rumors have speculated that Apple plans to completely kill off the aging iPhone 3GS, replacing it with a less-expensive version of the current iPhone 4 in an effort to lure budget smartphone buyers, or perhaps even enter the prepaid market here in the U.S -- but they may also find success with a cheaper model on the other side of the Great Wall as well.
“We estimate the high-end portion of China Telecom’s subscriber base is approximately 13 to 15 million, which represents a current revenue opportunity for the iPhone of $8- to $9 billion,” White continues. “We view this as the most reasonable near-term addressable market opportunity for Apple’s iPhone. However, if Apple offers a more economical, ‘simplified iPhone 4,’ the opportunity with China Telecom could be much larger.”
A downscaled iPhone spread across other carriers in China is estimated to expand Apple’s revenue potential to more than $200 billion compared to a mere $70 billion for a higher-end model, which is only likely to attract between 100 million to 125 million subscribers.
Follow this article’s author, J.R. Bookwalter on Twitter