AAPL Stock News: Why Apple Pay in China Matters

AAPL Stock News: Apple Pay is moving closer to a launch in China, a development that will accelerate the company's already ballooning profits in that country.

Apple stockApple pay was up nearly 1% in early trading today (Monday) to $115.

Chinese newspaper Wenhui News reported late last week that Apple Inc. (Nasdaq: AAPL) had registered a business entity in the Shanghai free-trade zone in June to run its Apple Pay business.

With iPhone sales growth slowing in markets like the United States and Europe, Apple has ramped up its efforts in China over the past year.

China has become a key source of revenue for Apple over the past couple of years. In the most recent quarter, revenue from China grew 112%, with iPhone unit sales rising 87%. Mac sales grew 33%, and App Store revenue doubled.

AAPL Stock News: China Is Ready for Apple Pay

That's why launch of Apple Pay in China is big Apple stock news. The mobile-payment service would not only give Chinese consumers one more reason to buy an iPhone, but will itself generate additional revenue through merchant fees of between 1% and 2%.

"We very much want to get Apple Pay in China. I'm bullish on Apple Pay here," Apple CEO Tim Cook told the Xinhua news agency in May.

And all those iPhone 6 models Apple has sold in China over the past year are Apple Pay-ready. What's more, a quarter of all payment terminals in China have the NFC technology required to use Apple Pay.

Unlike in the United States, most Chinese consumers are comfortable using their smartphones to pay for things. Given the size of the Chinese market, the potential is enormous.

It also bolsters the bullish argument for Apple stock. Several of Money Morning's experts already had an AAPL stock price target of $200 a share.

Follow me on Twitter @DavidGZeiler.

Why Apple Stock Price Targets Are Soaring: One low-key announcement from the Apple Event on Sept. 9 almost slipped by Wall Street's analysts, even though it will have a greater impact on AAPL stock than any of the new hardware the company announced. But once analysts finally recognized it, they started jacking up their Apple stock price targets. Here's why they're so enthused...

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About the Author

David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.

Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.

Dave has a BA in English and Mass Communications from Loyola University Maryland.

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