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Apple has reached a long-awaited deal to bring iPhone to China Mobile, world's biggest phone carrier.
The companies announced a multi-year deal, to begin selling the iPhone 5s and iPhone 5c in China on Jan. 17. Pricing was not announced.
Apple shares rose $4.56 to $549.02 in pre-market trading Monday. The deal, unveiled Sunday, could help drive earnings per share through 2014, says Brian Marshall, an analyst with International Strategy & Investment Group. "The deal is long-anticipated but finally announced," he says. "We think it's a big deal."
That's because analysts have estimated that the Apple could sell perhaps an additional 20 million iPhones in China in 2014 once it's working with China Mobile. But Creative Strategies analyst Ben Bajarin said the deal, while "huge for Apple ... is underestimated by most analysts. It could very well ramp faster than any of us can imagine."
Apple has sold about 23 million iPhones in China over the past year. China Mobile, which is roughly twice the size of the other two carriers combined that already sell the iPhone, is building out the world's largest 4G network. "There's pretty big pent-up demand on China Mobile for the iPhone," Bajarin says.
Apple CEO Tim Cook said as much in a statement announcing the deal. "China is an extremely important market for Apple and our partnership with China Mobile presents us the opportunity to bring iPhone to the customers of the world's largest network."
China Mobile, which has 760 million subscribers, has been seen as a crucial market for Apple."We know there are many China Mobile customers and potential new customers who are anxiously awaiting the incredible combination of iPhone on China Mobile's leading network," China Mobile Chairman Xi Guohua said in a statement.
Both Apple and China Mobile will sell the phones in their stores. Potential buyers can pre-register as of Dec. 25 on China Mobile's site.
Several published reports earlier had said pricing was a hangup in deal because gray-market prices made the phones significantly more costly than in other markets.
Regardless, "the China Mobile deal allows Apple to cast a wide net in one of the world's fastest growing smartphone markets," says IDC mobile tech analyst Kevin Restivo.