Apple has signed a deal with the world’s largest carrier, China Mobile, the Wall Street Journal reports.
The deal should be announced December 18, but it’s unclear when phones will go on sale.
Apple’s stock is up on the news in pre-market trading.
Apple analyst Gene Munster has a new note on what this means for Apple estimates. He says most analysts do not have a China Mobile deal factored into their estimates.
As a result, you can expect estimates to get bumped up, starting today.
Munster says China Mobile has 759 million subscribers, of which 176 million are “higher value 3G subscribers”. For context, Verizon and AT&T combined have 230 million subscribers.
Munster estimates China Mobile adds 17 million iPhone units to Apple’s fiscal year 2014. (The December quarter is the first quarter of Apple’s fiscal 2014.) An additional 17 million iPhone units is roughly equal to an additional 5% in revenue.
Munster’s says Apple has 6% of the smartphone market in China, and he’s estimating that it gets 2% of China Mobile’s subscriber base, or 10% of the 3G base.
This could be conservative considering how popular the iPhone is elsewhere, but he thinks it’s fair because the iPhone is significantly more expensive than the average phone sold at China Mobile.
“For China Mobile, the average unsubsidized smartphone cost ~ $US270, which compares to Verizon at ~$449. Comparatively, the iPhone 5C unsubsidized costs $US718 and the 5S costs $US846,” writes Munster.
In terms of when Apple sells phones at China Mobile, he expects the sales to be loaded in first month or two of availability. So, if the phone is on sale at the end of this month, expect some sales, but the bulk of the sales will be in the first three months of next year.
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