Apple off to strong start with China Mobile

SAN FRANCISCO - Apple's co-operation with China Mobile, the world's largest wireless carrier, is showing early signs of success.

China Mobile Chairman Xi Guohua told Chinese media and the Wall Street Journal that "multi-millions" of iPhones have already been ordered by customers ahead of the official launch of the smartphone on its network on Friday. He also said that co-operation between China Mobile and Apple will go beyond handsets.

Apple CEO Tim Cook, speaking at the same event, said he was "incredibly optimistic" about the outcome of the co-operation and noted that iPhones will go on sale in more than 3,000 new retail locations throughout China starting this weekend. He also said that more than half a million people in China are writing apps for iOS, Apple's mobile operating system.

Apple shares rose 2.1% to $551.89 in morning trading Wednesday.

The reference to multi-millions of pre-orders "is a positive read for China Mobile iPhone demand," Gene Munster, an analyst at Piper Jaffray, wrote in a note to investors Wednesday. The comments gave the analyst more confidence in his estimate that three million iPhones may be sold through China Mobile in the March quarter.

Apple has struggled in some developing markets because its iPhones are expensive compared to other handsets made by companies including Samsung and Xiaomi that run on Google's Android operating system.

However, Munster and other analysts expect China Mobile to subsidize the cost of the iPhones, which will likely help sales. Munster noted on Wednesday that Apple's Tim Cook said China Mobile plans to introduce new subsidies for the devices in the future.