In world's biggest market, "cheap" iPhone looks too pricey

In world's biggest
market, "cheap" iPhone
looks too pricey

The world's biggest public company and the
world's biggest country are at loggerheads over
the price of a phone.
Apple Inc's new plastic-backed iPhone 5c will sell
for 4,488 yuan China, almost $200 more than the
United States retail price of $549 and only 800
yuan less than its top-of-the-line sibling, the
iPhone 5s .
( Also see: Apple unveils iPhone 5c and iPhone 5s )
The pricing of what was expected to be a cheap
model aimed at growth markets such as China
and India has not only stumped investors, but
also Apple aficionados in China, a country of 1.4
billion people and the world's largest smartphone
market.
( Also see: 10 new features in Apple's iPhone 5s )
"My original estimate of the 5s price was around
3,000 yuan, but more than 4,000 - I think for a
budget version the price may be a little expensive.
I don't think I can buy one," said Liu Donghai, a
25-year-old chemical engineer.
"If the 5s is around 5,000, then it's similar to the
already-released 5 and 4S. I would accept this,"
he added.
Apple, whose market capitalisation of $449 billion
makes it the world's most valuable publicly
traded company, unveiled the two new handsets
at an event at the company's headquarters in
Cupertino, California, on Tuesday.
For the first time, it held a launch event in Beijing
hours later on Wednesday, a move seen as
underscoring the importance of the Chinese
market.
Lack of buzz
New Apple product releases tend to generate a
great deal of buzz, but the 5c's reception in
China, where fans have been known to queue for
days for new products, was lukewarm at best.
"The iPhone 5c is so expensive. Originally I
absolutely planned to buy it, now the price makes
me uncomfortable. Isn't it just an iPhone 5 with a
plastic back?" said Sina Weibo user
Shangzhiruixin.
( Also see: iPhone 5c price disappointment: 'Low-
cost iPhone' fails to check-in )
The phrase "iPhone 5s" was the most popular
search term on Sina Weibo, China's most widely
used microblogging service, on Wednesday, while
"iPhone 5c" did not appear on the top searches
list.
Other users questioned why anyone willing to fork
out well over 4,000 yuan for a smartphone would
not just pay a bit more for the premium 5s model.
( Also see: Apple says iOS 7 will be available
September 18)
But others believe that the 5c makes sense in an
increasingly competitive smartphone market,
where the cheaper the handsets the more bitter
the fight for dominance.
Apple's share of the China smartphone market
slipped to 5 percent in the second quarter,
according to research firm Canalys, trailing not
just Samsung but also the likes of Lenovo Group
Ltd, ZTE Corp, Huawei Technologies and Xiaomi
Technology.
( Also see: 10 big improvements in Apple's iOS 7)
"Even though Apple has a lower end iPhone now,
its price is still considered mid-end in China and
not low-end," said Sandy Shen, a Shanghai-
based analyst for Gartner.
Around half of China's smartphone shipments are
in the 700-1,500 yuan range, said Shen, but
competing on those prices isn't an attractive
prospect for Apple.
"Considering Apple's old rival Samsung and
domestic players such as Huawei, Lenovo and
Coolpad all have phones in that category, Apple
will still lose out in market share in these key
segments," she said.