Apples shares climbed 2.74 percent to close up at $566.32 on Tuesday on the NASDAQ, on news that UBS upgraded its stock from "Neutral" to "Buy" and also upwardly revised its price target from $540 to $650. The shares of the company, which announced the purchased of Topsy Labs, a Twitter-focused search engine, are further expected to rise when China Mobile, the mainland's largest wireless carrier with over 700 million subscribers, start selling Apple's latest iPhone 5s and iPhone 5c.
Reports suggest that China Mobile had begun taking pre-orders for the iPhone via its subsidiary website 139Life.com for just a few hours and analysts said Apple's shares will see an increase when the Chinese carrier starts selling the latest iPhones.
Apple launched the latest iPhone 5s and the budget iPhone 5c in September this year and the handsets have already hit the markets in North America, Europe and some other parts of the world. Rumors now suggest that Apple may have struck a deal with China Mobile, which is expected to start selling the iPhones as early as this month.
139Life.com has reportedly started taking pre-orders for both the iPhone 5s and the iPhone 5c late on Monday, December 2. The website is also said to have received over 1,200 orders for the new iPhones. However, it seems that the website realized its error on time and pulled down the pre-order page for the iPhones.
China Mobile has not yet confirmed when it will start offering the latest iPhones but a company spokesman told CNN's Chinese bureau on Tuesday that the carrier has still not reached a deal with Apple.
"A deal with China Mobile would give Apple a big boost in the China market as the largest local carrier has the most wealthy subscriber base. I estimate that among China Mobile's more than 700 million mobile subscribers, at least 10% or 70 million wealthier ones would be potential customers for iPhones," said Marvin Lo, an analyst with Hong Kong-based Mizuho Securities.
Amit Daryanani, an analyst with RBC Capital Markets, said on Tuesday, December 3, that he estimates that Apple will witness an additional $9 billion to $10 billion in annual revenue following a deal with China Mobile. Daryanani also says that the added revenue may see an addition of $3.00 in earnings per share to the company's stock.
Daryanani's estimates are based on the sales of around 17 million units of iPhones sold in China at a price tag of $560 per unit and 30 percent operating margins. The 17 million unit sale of iPhone represents only 10 percent of market penetration in China, which leaves a much bigger market to tap in the near term.
Apple's shares were up 0.03 percent at $566.50 during pre-market hours, the highest in 2013. The company's market valuation now stands at $509.54, making it the biggest U.S. company in terms of market capitalization.
