3 Reasons China Unicom Limited (CHU) Earnings Just Made Apple Inc. (AAPL) Ecstatic

China Unicom: China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU), the second largest mobile phone company in China, posted impressive third quarter profits that beat analysts’ estimates. Although this is great news for China Unicom, other companies, including Apple Inc. (NASDAQ:AAPL), should be excited as well.

The mobile carrier’s net income increased 51 percent when compared to the same period a year earlier. Additionally, revenue increased 19 percent in the third quarter. While China Unicom took its business to new heights, China Mobile Ltd. (ADR) (NYSE:CHL), the largest phone company in the world (measured by subscribers), posted its biggest profit decline in the last 14 years.

You may know China Mobile as the regional carrier without a deal with Apple.

Apple Inc. (NASDAQ:AAPL), China Unicom (NYSE:CHU)

Who wouldn’t want that rainbow of smartphone sanctity?

Now, the fact that Apple wants to get in bed with China Mobile is no surprise. However, with things going so well at China Unicom, Cupertino should be happy with this upcoming relationship.

Let’s take a look at three reasons why China Unicom’s earnings are good for Apple Inc. (NASDAQ:AAPL):

1. More potential subscribers for the iPhone.

During the third quarter, China Unicom added roughly 12 million users to its third generation wireless network. To Apple, this means one thing: more people who will potentially use its iPhone. Easy enough, right?

Now that the new iPhone 5S and 5C models are available at the carrier, we expect Chinese consumers are fighting hand over fist to get their hands on one of these devices.

2. The lack of a China Mobile deal (for now) is easier to swallow.

Even though Apple’s China Mobile deal appears to be coming soon enough, there is nothing written in stone just yet. Apple CEO Tim Cook has made it clear that China could be the company’s biggest market in the future.

Until Apple and China Mobile join forces, Cook and company can rely on the business it will receive through China Unicom and China Telecom Corporation Limited (ADR) (NYSE:CHA). This should be enough to ease the pain for the time being.

3. More confidence.

It’s all about confidence right?

It is one thing for China Unicom (Hong Kong) Limited (ADR) (NYSE:CHU) to receive reservations for the new iPhone. It is another thing entirely for the carrier to prove to Apple that it will help the smartphone maker further establish itself in the Chinese market with the 5S and 5C.

With an earnings report like this, Apple Inc. (NASDAQ:AAPL) has to be confident moving forward, and investors should be as well (for next week’s earnings call).



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