Tag Archives: sasac

China smartphone subsidy cuts likely to impact Apple

Apple’s (AAPL) smartphone sales growth in China is likely to take a hit because of actions by the Chinese government. China’s State-owned Assets Supervision and Administration Council (SASAC) might be ordering its telecom carriers to reduce their sales and marketing costs by about 20%, out of which handset subsidies likely amount to more than one-third, UBS Securities analyst Steven Milunovich said Tuesday. China Mobile (CHL), which began selling the iPhone in January, cited the Apple (AAPL) handset as a reason why its subsidies on all phones will rise 29% this year, Bloomberg reported. About 50% to 60% of phone sales in China are subsidized  

China government action could hurt Apple iPhone sales

Two government initiatives in China could hurt Apple’s iPhone sales in the near term, UBS analyst Steven Milunovich warned in a research report Friday. China’s State-owned Assets Supervision and Administration Commission (SASAC) is urging the three wireless carriers to reduce their sales and marketing costs and also is taking the lead to form a tower-building company to manage mobile base stations. “Our telco team sees these two factors potentially curbing the pace of the LTE and TD-LTE roll-out in 2014-15,” Milunovich wrote. UBS estimates that China Mobile ‘s (CHL) goal of adding 80 million to 90 million 4G TD-LTE subscribers this year could be cut in half to 30 million to 40 million. China Mobile is the country’s largest wireless carrier. The Chinese agency is considering a plan for its three wireless carriers to reduce marketing costs by 20%, which would lower subsidies for high-end smartphones such as Apple ‘s …