Tomahawk, WI 01/03/2014 (BasicsMedia) – Apple Inc. (NASDAQ:AAPL) and China Mobile Ltd. (ADR) (NYSE:CHL) announced an iPhone distribution deal in early December 2013, and promised to formally close that deal on December 18. However, that was not expected to happen before December 22.

It is fair to say that the negotiation on the deal between Apple Inc. (NASDAQ:AAPL) and China Mobile (CHL) dragged on for a very long time and during this time, it looked like Apple Inc. (NASDAQ:AAPL) was badly in need of a deal with the world’s leading telecoms carrier. However, in reality, China Mobile needed the deal more than Apple Inc. (NASDAQ:AAPL) did. Why was this so?

Apple Inc. (NASDAQ:AAPL) employs a tactical marketing strategy that always helps the company to succeed even when it was expected to fail. While entering a new market which presents both challenges and opportunities the company does rush to cut deals with market leaders. Instead, it actually goes for the smaller players.

The strategy

In China. the company first entered into iPhone distribution deal with China Unicom and China Telecoms. These carriers trail China Mobile which is the market leader. By inking a deal with these smaller carries, Apple Inc. (NASDAQ:AAPL) helped them to wean the customers away from the larger China Mobile Ltd. (ADR) (NYSE:CHL).

As time progressed, it was clear that China Mobile was losing share in the big-spenders market, as it leaned towards the smaller carriers which were offering high-end smart phones. It was therefore, a sine-a-qua non for China Mobile Ltd. (ADR) (NYSE:CHL) to offer iPhones on its network, even if it may not have planned it from the beginning.

This strategy not only helps Apple Inc. (NASDAQ:AAPL) to penetrate the market easily, it also helps the company to have its way with terms and conditions when engaging larger players. This is the global game plan that the company employs, and it is the reason why Apple Inc. (NASDAQ:AAPL) is often slow, but is sure in cutting distribution deals with carriers in the international market.

But the question is whether the company can continue to rely on this strategy in the future. As long as Apple Inc. (NASDAQ:AAPL) continue to develop quality and distinctive products, this strategy will continue to win its deals in more markets. And when it comes to quality, Apple Inc. (NASDAQ:AAPL) has no comparison on most of the parameters, so investors can count on the company in winning more distribution deals with larger carriers in the international markets.

What should be remembered though, is that Apple Inc. (NASDAQ:AAPL) is facing a business-life threatening competition from Android OS which is developed by Google Inc (NASDAQ:GOOG). The adoption rate of this operating system among Smartphone makers has gone viral.

The popularity of Android is spread across high-end and low-end smart phones, thus locking out Apple Inc. (NASDAQ:AAPL) in most markets. The threat of Android is not just limited to Apple Inc. (NASDAQ:AAPL), even Microsoft Corporation (NASDAQ:MSFT)’s Windows Phone is under pressure.


There is no better way for Apple Inc. (NASDAQ:AAPL) to survive the Android onslaught than sharpening its innovative edge. The company is known to take the tech market with surprise, whenever it releases a flagship.

Last year the company released an upgraded line of tablets called iPad Air and iPad Mini with retina display. It also released Mac Pro, which is high level PC workstation that is already taking the market by storm.

Apple Inc. (NASDAQ:AAPL) is also expected to release its new line of iPhones called iPhone 6. The company needs to continue this trend of quality products in order to improve its performance against the growing competition from low-cost smart phones running on Android.

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