Tomahawk, WI 12/19/2013 (BasicsMedia) – Apple Inc. (NASDAQ:AAPL) is the leading manufacturer of high-end smartphones and tablets. The company also develops operating systems used in mobile devices and desktop computers. This week it launched an upgraded version of its Mac Pro, a new powerful desktop that starts at $2,999.

Instead of updating the market on the progress of its deal with the world’s largest phone operator China Mobile, the company used the day to unveil Mac Pro. This miss has set in motion a lot of speculative talks.

Earlier this month, the company announced that its pursuit of China Mobile for a deal in the offering of iPhone on the latter’s network was bearing fruits. Reports from the two companies indicated that a deal would possibility be announced on Dec. 18.

It was a long wait on Wednesday, Dec. 18, which ended in disappointment for the market. It was therefore easy to understand why AAPL traded down on NASDAQ. Not even a world came from AAPL discussing the level of the talks so far. Only a report attributed to China Mobile chairman Xi Guohua said that the talks were still ongoing.

Why China Mobile deals is important

In the past weeks since the announcement of possible partnership between Apple Inc. (NASDAQ:AAPL) and China Mobile, investors have been widely betting on AAPL’s stock. As a result, the stock has been able to breach several price barriers in recent days.

A deal with China Mobile will expose AAPL’s iPhone to a market of more than 760 million people who are the subscribers in China Mobile network. This will offer an opportunity for AAPL to boost its sales in China given that it has had declining sales in recent times owing to intense competition.

The company is already in partnership with about two other telecoms operators in China for the offering of iPhones. However, there have been little to show for these deals given that the two companies command a marginal market share.

Therefore, landing a deal with the towering mobile operator China Mobile would be a dream-come true for AAPL.

Poor performance

Apple Inc. (NASDAQ:AAPL) still retains its reputation as the maker of high-performance smartphones and it still controls the upper tier smartphone market. However, so far in the year, it is not in the best of shape. That the company is troubled can also be seen in its stock performance. The stock is marginally up 3 percent year-to-date at a time when the Nasdaq Composite Index is up more than 30 percent.

The company is battered by rivals offering cheap smartphones and the rising popularity of Android powered phones is also dimming its lights. The entry of tech giants Google Inc (NASDAQ:GOOG), Amazon.com Inc (NASDAQ:AMZN) and Microsoft Corp (NASDAQ:MSFT) into smartphone and tablet business is also a source of big headache for the Cupertino-based company.

The entry of the aforementioned tech companies into smartphone business is seem more as a play to drive down the cost of smartphones rather than business diversification on their part. Since these companies have heavy presence in Internet content business, lowering the prices of smartphones will increase the number of Internet users which would consequently boost their revenue.

Currently Apple Inc. (NASDAQ:AAPL) is trading at around $550 per share and its market cap is about $495 billion.

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