Apple Inc. (NASDAQ:AAPL) is looking to expand its footprint in China a market that has turned to be important and key in terms of returns, especially on the hardware front. CNBC reports that the giant hardware company is in talks with Alibaba Group Holding Ltd (NYSE:BABA) and other banks about launching Apple Pay in the country.
A partnership between Apple Inc. (NASDAQ:AAPL) and Alibaba could be in the offing, the latter’s CEO, Jack Ma, having affirmed in the past they could partner on the payment front. CEO Tim Cook has already said that Apple Pay prospects in China remain brighter thanks to the impressive smartphone adoption rate.
“This is very good news; now is this Apple Inc. (NASDAQ:AAPL) and Alibaba trying to forge a partnership that will allow both of this companies to essentially, get around regulators in China. The NFC technology, which essentially union pay runs on the same as Apple Pay and Alibaba Group Holding Ltd (NYSE:BABA) doesn’t operate on the same technology. This is something that may be an issue for them, but it makes a lot of sense for Apple to want top partners with Alibaba,” said Mr. Timothy Seymour, CNBC contributor.
Apple Pay service has until now been limited to the U.S where Apple Inc. (NASDAQ:AAPL) has for quite some time been drumming support for the service backed by strong iPhone 6 sales. Expanding globally especially in China where iPhones are becoming a mainstream product could be big for the iPhone giant in terms of returns.
Teaming up with Alibaba Group Holding Ltd (NYSE:BABA) makes a lot of sense and should offer Apple more room for accelerated growth taking into consideration the market share that Alibaba controls in the e-commerce space. Talks with UnionPay, which Apple hopes to use its network to launch its service in the country could start soon, having gone cold in the recent months.
“People have been focused myopic on the watch and saying what a failure the watch is going to be, but instead of worrying about the watch how about you worry about the things they are doing right. The stock hasn’t performed that well, but the market has been a little bit shaky, and the market does not know which direction it is going to go in. If the market starts to tail off, these stocks are going to be used as a source of funds. That is something you need to think about as an entry level for Apple Inc. (NASDAQ:AAPL) at this price,” said Mr. Brian Kelly, CNBC contributor.
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