| Ticonderoga Securities analyst Brian White said in a research note Wednesday that China is "the biggest opportunity for Apple's iPhone." White estimates that 3G mobile subscribers in China will exceed 250 million by the end of this year, compared with only about 118 million in November. That would surpass the U.S. to become the largest 3G market in the world. "Customer response to our products in China has been off the charts," Apple CEO Tim Cook said in the press release. "With the launch in China next week, iPhone 4S will be available in over 90 countries making this our fastest iPhone rollout ever." The success in China is become much more important to Apple. The contribution to Apple's revenue from Greater China rose to 16% in the most recent quarter, up from 12% in all of fiscal 2010. During the company's last quarterly earnings call, Cook noted that China is Apple's "fastest growing region by far." "We believe the success of the iPhone 4S launch in China will be important to Apple's results in 2012, not only due to iPhone 4S sales but also from the halo effect this buzz creates around other Apple products," White writes. "For example, Apple generated...$4.5 billion in revenue (up 270% Y/Y) compared to merely 2% of revenue in FY09." Wall Street analysts aren't the only ones touting the importance of emerging markets for Apple. Mutual fund manager Jerry Jordan, whose Jordan Opportunity Fund( JORDX) owns Apple shares, says that as the "emerging market world shifts from 2G to 3G smartphones, demand will explode." "In terms of sales, it's enormous," Jordan says of Apple heading into 2012, and his comments came before Apple made the announcement of the iPhone 4S launch in China Wednesday. As far as determining the success of the iPhone 4S in the 68 other countries where the device is already available, investors will finally get a handle on sales shortly after the next iPhone 4S rollout. In a separate announcement, Apple said it will hold its fiscal first-quarter earnings conference call after the market closes on Jan. 24. It may be the iPhone 4S that drives Apple to its best quarter ever. Analysts expect Apple to report holiday quarter revenue of $38.1 billion and earnings of $9.83 a share, based on a poll by Thomson Reuters. With the iPad expected to face some competition from the cheaper Amazon.com Kindle Fire tablet during the fourth quarter, it could be on the iPhone's shoulders to save Apple's margins. Analysts are forecasting gross margin in the holiday quarter of 41.7, which would be a rebound from 40.2 in Apple's fiscal fourth quarter. |
