Apple Eyes China

iPhone has created fortune for Apple Inc. (AAPL) in the recent days. During the third quarter, the company reported iPhone sales of 5.2 million, representing 626.0% unit growth over the year-ago quarter. The value of iPhones sold during the quarter was $2.9 billion. So it goes without saying that iPhone has become a major revenue earner for the company.

Continuing with the success of the product, Apple is approaching China, one of the largest mobile markets in the world. As per a recent publication, China has about 687 million mobile subscribers, compared to 270 million subscribers in the U.S. So China offers great opportunity for generating additional iPhone sales, although the company has to face competition from the low cost Chinese products. Even some of the local Chinese phone companies have plans to launch smart phones going forward.

China Unicom (Hong Kong) Ltd. (CHU) is expected to sell Apple’s iPhone  in the country. Although negotiations with the wireless operator are still on, we expect the deal to conclude successfully, which will in turn help Apple to market the product in China.

But recently, some incidents have been reported against exploding Apple iPhones and iPods. The incidents took place in certain European Union (EU) member states, prompting the European Commission to ask for clarification from manufacturer Apple. This has created some negative sentiment about the product in the market. So although China is a very big market, the company will have to keep a strict vigil on quality if it is to win against the local companies as well as many others that are fighting for a foothold in the country.

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