2 Million Reasons to Believe in Apple Again


Let's not be so quick to throw in the towel on Apple , fickle Wall Streeters.

The tech giant announced yesterday that it sold more than 2 million iPhones in China over the weekend. It's a pretty impressive milestone in the country's first weekend of iPhone 5 availability, for a few reasons:

  • Unlike the U.S., where smartphones are heavily subsidized by wireless carriers, Chinese buyers have to pay retail prices that are three to four times higher than we pay here.

  • Initial reports singled out some Apple Store locations in China that weren't exactly hopping with customers on Friday. The Wall Street Journal China blog-- surveying the lack of customers at a store in Beijing -- called this "arguably the least eventful launch of an Apple device" in that particular store's four-year history.

  • Apple's largest carrier -- China Mobile , with a whopping 703.5 million customers -- runs on a network that is still incompatible with the iPhone.

Google's Android will continue to be the mobile operating system of choice in China. The devices are just too cheap in markets where wireless carriers aren't forking over hundreds of dollars to subsidize every smartphone that they sell. Android gives carriers the gamut of choices and low price points that mainstream consumers crave.

However, Apple's surprisingly strong weekend -- a record in China for iPhone debut -- should silence concerns that Apple is toast in the world's most populous nation.

Yes, there was a spike in Chinese retailers offering healthy trade-in allowances on older iPhones. This is a move that surely helped encourage owners of earlier iPhone models to upgrade. The good news for Apple is that there is still plenty of untapped potential.

China Telecom and China Unicom began selling the iPhone 5 over the weekend. They are two of China's three largest carriers, but they're distant rivals to China Mobile. The leaves us with three catalysts waiting to kick in for Apple. China Mobile's inevitable embrace tops the list, but let's not forget that China is still relatively early in the smartphone migration process and that carriers will likely begin shelling out larger subsidies as the economy grows to the point where it's financially feasible for the telcos to do so.

Apple could be doing better in China, but it's really just getting started.

Apple on top
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The article 2 Million Reasons to Believe in Apple Again originally appeared on Fool.com.

Longtime Fool contributor Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, China Mobile, and Google. Motley Fool newsletter services recommend Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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