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This Is Why China Is So Important For Apple

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China’s three wireless carriers reported their mobile subscriber numbers for the month of August and the results show why the country is so important to Apple . China’s total wireless subscribers increased 6.6% year over year or 75 million units to 1.27 billion.

There are now 497 million 3G subscribers in the country which is an increase of 4.4 million month over month and an increase of 137 million year over year (38% growth). This compares to the US, which has 173 million smartphone users out of a total of 241 million wireless subscribers (72% penetration) per comScore. China’s 3G subscriber base is over two times the number of US total wireless users and within a year should be over 600 million and could be over 700 million by 2016.

I have developed a Google Doc with data going back to June 2009 available via this link.

Apple doesn’t need China yet but will next year

Apple announced that it had sold over 10 million iPhone 6 models in the first three days. They beat the previous record of 9 million iPhone 5c’s and 5s’ from last year and Tim Cook said that the sell-through shattered all previous launches.

Lead-times for the iPhone 6 are at 7-10 business days on Apple’s US website and 3-4 weeks for the 6 Plus, and the company’s partner websites tend to have even longer lead-times. Since there is a supply constraint for all the 6’s having China be part of the official first wave would only have made it more difficult for Apple to fulfill customer orders.

It appears that Apple still needs one more license from the Chinese government to be able to offer the iPhone for sale in the country per a Reuters article. The major question is when will Apple receive it, which no one in reality knows except administrators in China’s Ministry of Industry and Information Technology (MIIT).

Apple plans to be selling the iPhone 6 in 115 countries by the end of the year but doesn’t detail which ones. Supply could remain tight through the holiday season without China but by early next year pent up demand should be satisfied and Apple will need to be selling its new iPhones there.

China Mobile ’s 4G subscriber base growing rapidly

China Mobile reported that its total wireless subscribers increased to 796 million in August or 6% year over year. Its 3G subscriber base grew to 242 million or 53% year over year but only added 1.3 million units month over month.

It was the 4G segment which showed huge growth going from 20.4 million subscribers in July to 29.6 million in August. China Mobile only launched 4G technology in February this year so ramping to 29.6 million users is quite impressive. Keep in mind that this is only 3.7% of its total subscribers and that its 4G subscriber base is already 17% of the US’ total smartphone users.