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Report: 3G subscribers in China grew 79 percent in 2013

updated 08:43 pm EST, Tue January 21, 2014

Emerging middle class shows strength; now 417 million 3G users in China

Apple's timing on its years-in-the-making deal with China Mobile may turn out to have been prescient: the country's middle class is expanding rapidly, and with it the ability to enjoy services such as 3G and now LTE smartphone service. According to a new report from Cantor Fitzgerald analyst Brian White, the country grew its 3G-using cellphone subscriber base by 79 percent in 2013, to a total of 417 million users.



This puts smartphone users at about one-third of the current total of cellphone users, estimated to be 1.23 billion. China Mobile, which whom Apple just recently closed a multi-year deal, has the majority of those subscribers with an estimated 780 million customers -- and has just under half of the total user base of 3G/LTE customers, making it a vital partner for Apple's growth in China.

Analysts have pushed a consensus estimate for Apple to sell around 17-18 million extra iPhones to China Mobile customers in 2014 (the company already sells iPhones to the other two largest China carriers), but White expects the number to go higher -- possibly 24 million units. Depending on the actual final figure, the deal could add between $3 and $4 per share to Apple's earnings over the course of 2014.

White notes that China also has a great deal more room for growth than other, more mature markets such as the United States. Analysts believe that about 70 percent of the cellphone subscriber base in the US is already on smartphones, compared to only a third in China. He believes that the country will increase its middle class substantially over the next decade, in much the same way the US did following World War II. If true, there would be tremendous growth opportunities for Apple and other smartphone makers as the market for the relatively-expensive class of cellphones and related devices like tablets expands.



By Electronista Staff
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