China loves brand names. The top brand in the country is Apple Inc. (NASDAQ/AAPL), as is the case in Japan and Taiwan, according to Nikkei BP Consulting. Apple is the second top brand in South Korea.
Apple is the most desirable PC brand in China and one of the top global brands, as I discussed in “Apple’s China Ventures Keep it at the Top of My Stock List.” The numbers don’t lie. In the first quarter, sales from Greater China (including Hong Kong and Taiwan) accounted for about 20% of Apple’s global revenues.
The much-anticipated release of the “iPad 3” in China after months of delay was a big day for Apple, which is king of the tablet market in the country with a 76% market share. Samsung Electronics Co. Ltd.’s “Galaxy” tablet is struggling to maintain its small share.
The massive size of the country’s mobile phone market will continue to provide the catalyst for the sale of Apple “iPhones” and “iPads” in the country.
The numbers are staggering. China is the world’s largest mobile phone market with the number of mobile subscribers surpassing the one-billion mark in June.
The adoption of the next generation 3G and 4G networks will also help to drive additional growth in the country’s mobile phone market, as there will be a need for new phones.
These are exciting times for China’s mobile market, as the regulators, in an effort to increase competitive powers, decided to allow the operation of three major carriers.
The top mobile company in the country is China Mobile Limited (NYSE/CHL). With a market cap of around $225 billion, the company is massive. For instance, by comparison, AT&T Inc. (NYSE/T) is the largest mobile provider in the U.S. with a market cap of $208 billion, and Verizon Communications Inc. (NYSE/VZ) has a market cap of $126 billion.
China Mobile is one of the largest companies in the country and would rank high in the U.S. market. It is the market leader and can be considered a “widow” stock for long-term buy-and-hold investors. The company is ranked the top brand in BusinessWeek’s “20 Best Chinese Brands.” The stock pays an annual dividend of $2.03 for a current dividend yield of 3.6%, based on the prevailing stock price of $56.26 as of July 20.
The company had a whopping 683 million subscribers, or 66% of all mobile users in China, at the end of June, including 67.1 million 3G subscribers. The company is the world’s largest provider of cellular services based on subscribers, with China Unicom Limited (NYSE/CHU) a distant second with 219 million mobile subscribers and China Telecom Corporation Limited (NYSE/CHA) third with 144 million mobile subscribers.
China Mobile has also set its sights on expansion outside of the Great Wall. In this capacity, the company owns Luxembourg-based Millicom International Cellular S.A. (OTCBB/MIICF), a telecom operator with about 15.2 million mobile subscribers in 13 countries in Latin America and Africa. The potential market size is about 270 million people.
As the country develops its 3G and 4G networks, I expect a boom for mobile devices. Apple knows this and wants to capitalize on the massive potential in China.
The Chinese mobile market is massive and worth a look.