4. Negotiations between China Mobile and Apple are far from over.
Many industry analysts are singing pretty much the same tune: To tap into the world's biggest phone market, Apple has to cooperate with China Mobile, the world's biggest mobile carrier with almost 700 million users. While there is evidence that China Mobile and Apple have been talking, it’s far from clear how much China Mobile is prepared to give, in terms of subsidies it must offer to ensure big sales of iPhones in China.
It’s clear that Apple wants China Mobile to offer iPhones. But a better question is how badly China Mobile needs iPhones to win more subscribers, and how actively it will promote the switch from feature phones to new smartphones designed for TD-SCDMA networks. Don't forget that China Mobile already has a variety of entry-level Android smartphones designed to work in TD-SCDMA. China Mobile also just added Nokia’s Lumia smartphones to its arsenal.
Apple could help China Mobile bridge the gap by rolling out iPhones that are compatible with not just TD-SCDMA but also the upcoming TD-LTE. This could boost China Mobile’s TD-LTE marketing campaign. But, by all accounts, that market segment (TD-LTE handsets that work in multi-band, multi-standard global cellular networks) is not likely to take off until late 2013.
5. China is Apple's second-largest and fastest-growing market, contributing 15 percent of its revenue.
Apple’s unique qualities, which often run counter to the conventional wisdom in the consumer electronics industry, include: leading with less variety in terms of models and pricing. It doesn't hesitate about being the highest priced smartphone and frequently bulldozes its way into new markets by leveraging the sheer power of its brand name.
This is what we admire and sometimes fear about Apple. But this is also precisely the reason why we keep wondering how long Apple can sustain the myth of its unique qualities. China may be the market that breaks the mold.
It's worth noting that Citi downgraded Apple's stock on reports it is lowering iPhone 5 orders in its supply chain.
So while demand may or may not be solid in China, apparently it is a bit slower than expected globally if these reports are correct.