“Apple Inc. is offering its newest iPhones through China’s smaller wireless carriers and has yet to announce a deal with China Mobile Ltd., which has a customer base more than twice the size of the U.S. population,” Bloomberg News reports. “The 5S and 5C models are being released for the networks of China Unicom (Hong Kong) Ltd. and China Telecom Corp. starting this month.”
“The agreements will make Apple’s new smartphones available to about 37 percent of China’s 1.2 billion wireless subscribers as it competes with domestic rivals including Lenovo Group Ltd., ZTE Corp. and Xiaomi Corp,” Bloomberg News reports. “The 5C will start at 4,488 yuan ($733) and compete with handsets sold for as little as $100 that helped erode Apple’s market share to 5 percent in the second quarter from about 9 percent a year earlier. ‘It’s not cheap enough,’ Tucker Grinnan, a Hong Kong-based analyst with HSBC Holdings Plc., said of the iPhone 5C in an interview with Bloomberg Television today. ‘We are disappointed with the price point. It is a high-end phone in China.'”
MacDailyNews Take: Apple isn’t that kind of company, dummy. They don’t do “cheap.” The type of customers that are acquired by “cheap” aren’t worth the effort. Newsflash: Cheapskates don’t buy apps, music, movies, books, etc. Generally, they steal them instead. They also skimp on data (hence the far greater share of online devices for iOS than android), so they’re less desirable for the carriers, either. Other handset makers, who have nothing else to offer, can have that type of customers and the razor-thin margins such endeavors engender.
Bloomberg News reports, “The iPhone 5C will be priced between 4,488 yuan and 5,288 yuan, Apple said on its website. Grinnan said he had anticipated the new devices would cost between 2,500 yuan and 3,000 yuan. ‘The iPhone will still be a premium product in China,’ Anand Ramachandran, a Hong Kong-based analyst with Barclays Plc., wrote in a report yesterday.”
MacDailyNews Take: Yes, because Apple makes only premium products and because Apple is an aspirational brand, for the love of Jobs. Anyone expecting a “cheap” iPhone simply does not understand how Apple Inc. works or why it is phenomenally successful.
Bloomberg News reports, “Cupertino, California-based Apple is close to securing a deal with China Mobile and is preparing to ship iPhones to the carrier, a person with knowledge of the matter said last week.”
Full article here.
This is what I’ve been saying all along. Where were these people who are saying “iPhone 5C feels like a rip-off” back when Apple released iPod Nano? I swear the Apple community is falling apart, and it is sad. I love Apple products, and I even joined an Apple club on my college’s campus. Why has everyone become so jaded about this?
The iPhone 5c should be between $429 and $450 off contract.
IMO Apple did price it too high. MUCH higher than anyone thought.
It’ll be interesting to see how well these things sell in China.
How would they have done that? By reducing the spec? Buy an older model – the 4S. Lowering the quality damages the brand so they won’t do that.
Not directed at you, but many people seem to want a regular iPhone but for Apple to just sell it for a lower price – resulting in lower profit. I don’t have real numbers, but say they knocked off $100 through some combination of reduced manufacturing costs, and reduced profit. Would the increase in sales offset that profit? Maybe not, even if it balanced out what would they have gained customers, but increased support costs, and possibly many of those customers would be low spending so earn no revenue on an ongoing basis.
Apple seem to be one of the only companies who seem to analyse what money is worth taking, others just looked to take in cash from any area without thought of the consequences and benefits. Not saying Apple are right, but at least they seem to consider things.
Sure. That’s what everybody thinks. You’re just honest enough to say it. But here they come for your throat in 3….2….1….!
I hoped that iPhone 5C will be an iPhone 4S in a new plastic enclosure with taller screen. This would enable sale price as low as $299, considering the price of the latest iPod touch, and yet with great margin.
I agree, the 5c should have been priced lower for China.
China Mobile would have a better educated say on that and if they signed a deal with Apple, they know better how worthwhile it is.
Everyone forgets that premium priced iPhone were selling like hot cakes in China for even higher prices that US list prices…
Wall St. Doesn’t have a clue or the slightest understanding about the US economy and markets ( remember the financial meltdown?) let alone China.
iPhone in China will be HUGE.
Exactly – who knows what Apple charge the distributors for the phones. The assumption that they pay the unlocked price is wrong.
For any product you get better pricing with volume. China Mobile will have good leveraging power with their customer base.
Wall St. is only interested in how they can make money. Aapl was pumped up ahead of the product release and I bet a lot of brokers sold positions beforehand knowing the hyperbole would create disappointment.
Add this to the expanding list of Tim Cook fails.
Instead of redesigning the flagship model to add larger screens and other features that consumers expect, he comes out with a purported “budget” phone and prices it way out of the markets it’s supposed to compete in… then stops making the iPhone 5 altogether.
This guy can’t do ANYTHING right. I’ll start buying Apple products again when Tim Cook’s only job is to stay at home and bake snickerdoodle cookies for his “Life Partner” in his pajamas!
Apple doesn’t “redesign the flagship model” on off years because Apple updates its phones on a 2-year cycle TO MATCH THE CARRIERS’ TWO-YEAR CONTRACT CYCLES. That’s why there’s an iPhone X, and then an iPhone Xs.
Furthermore, who said that the iPhone 5c was going to be a budget phone? Did Apple? No! A bunch of analysts with their heads up their asses did, because they want Apple to move downmarket and sacrifice margins … yet somehow still turn a profit. Because these imbeciles think that market share is the only metric that matters. Instead, Apple designed a slightly cheaper iPhone that is still a premium device and won’t erode their premium brand, but introduces much-needed VARIETY into the iPhone lineup. Not only that, but it makes sure that the iPhone 5s won’t be cannibalized to nearly the extent it would have been.
Is it how I would have done it? Not exactly. But think of it like this: for every iPhone 5c Apple sells, they’re making at least $100 more than the knuckle-dragging mouth-breathers of Wall Street and the techno-blogs would have them make. Apple will still sell a shit-ton of iPhone 5c, and they’ve protected the iPhone 5s.
But whatever. You obviously know better than Tim Cook.
The price of the 5C will go down later in the year. At this point Apple will benefit from the release and the Xmas season. After that, pricing could be lowered to put more pressure on the competitors.
If you listen carefully to what was said at the launch, some key points were made.
1. Apple now have 2 iPhone product lines. High and Mid range
2. Apple will continue to distinguish itself by superior design and user experience.
3. They are continuing to add carriers and LTE is a big deal for adding more over time.
4. Innovations like the fingerprint sensor will provide more incentive to stay with the iPhone and reclaim those who have been trying out Samsung.
I, for one, had been debating whether to upgrade my 4S. The performance is still good and it could last for another year. Given the new features, especially the fingerprint sensor and that I can get $200 for the old phone, I will be getting a new phone.
Apple has three phones available: medium, plastic medium, and high end.
What a lot of people are saying is that the 4S is too old to compete (really — visit a retail store and compare your old 4S to the newest phones of almost ANY brand) , the 5C is overpriced and the colors downright revolting for at least 49% of the adult population, and the brilliant 5S simply will not attract the people who are asking for different screen sizes or are budget-constrained.
Time will tell, but if Cook was smart, he’d have a 5″ screen phone with 5S internals ready to go in the first quarter of 2014, and he’d push a lot harder to get the iPhone supported on more carriers around the globe. His extreme slowness on that front is probably the most disappointing aspect of his unstellar tenure so far..
It’s unimaginable to me that a tiny 4″ device with a plastic back is priced higher than a 7.9″ device with an aluminium back. Crazy.
When has the cost of miniaturization not been high? The only parts of the iPad mini that would be more expensive are the LED panel and the battery. I would guess those are more than offset by the higher cost of manufacturing the 5C.
BLN… You actually make a good point for once. But thjnk about this, the smaller something is the more expensive it is to make. Why an iPod touch (wifi only) is 299.99 with older tech. The 5c has all the same internals as a 5 plus a bigger battery, better wireless and the like. The iPad mini is using 2 yr old tech which is why it can be 329 to start, but even if you add a data connection, add $130… 459 or, the price of an unlocked 4s… Which, incidentally has the same processor and internals as an iPad mini. So, when you consider the technology involved the pricing makes sense
Both phones are a let down let alone the entire event and lack of products. What does it take to realize that people want a choice of a bigger screen 1080p better ppi LIKE SAMSUNG. Stop thinking the competition is so dumb. They are killing Tim cook and apple. As for two year cycles that’s bull. Change is change. Stop defending bad decisions. And now Samsung gets that market and its e I system. But hey. Apple does nothing for their ecosystem. They have one by default and never exploit it. Damn. They don’t even advertise. I hear android commercials all the time and they work and kids and adults think its cool. And they think apple is for snobs or dumb people who pay too much for ‘nothing that much better than Samsung’. I ask all the time. Hell, most kids i ask, (I’m at a college) think their Samsung android phone is better. Apple is cutesie to them. So the stock is down. No MacBook Pro for back to school. No exciting programs pro programs. Where is Mac Pro for back to school? Just a miniature air. There is nothing about either new phone to compel even me to get one from my 4s or 5(wife). We with kids seriously needed a 128 gb hd for tons of photo video. By the way. Hate the cloud. Ever have all your pictures start scrolling on every TV in the house when you are in the other room?. Not cool. And a bigger screen would have made me jump. Last. Who the F gets by with 16 gb phone? So apples price is really higher. Ad the free 4s at 8gb. Who wants that??? That’s stores what. The op system, one cd and three home videos? No thank you. Is event makes apple appear snobbish and disconnected.. So I’m waiting and waiting. Hope china mobile signs on but that helps me with nothing. Thanks for nothing apple and Tim cook.
Honestly, the fingerprint sensor and camera on the 5S make me want to upgrade from my 5. They are way out in front of the competition on this.
Bravo, John. I’ve been outspoken about how slow Cook & Co. have progressed. A company with the resources that Apple has should not be this slow. It’s as though the company can’t develop the Mac and the iOS platforms at the same time — and notwithstanding a few exceptions like the excellent iPhone 5S, overall Cook makes a new product introduction as exciting as watching paint dry — not because of his dull personality, but because the vast majority of Apple’s lauded innovation now comes in small, often meaningless, steps. The 5C isn’t going to prompt any iPhone 5 user to upgrade, period. That’s pathetic.
…and while i agree with eN about the 5S being a very nice technical step forward, Apple is clearly losing the smartphone market to more nimble, less costly companies that don’t compete on quality, but win more and more sales based on price. Cook should know that much of the world has been brainwashed by Wal-mart to believe that initial purchase price is all that matters. But what does Cook do to shore up the lower-price end of the Apple range? Nothing. Sadly, even the most die-hard Apple fanboys have to take a look at the iPhone 5C and question its value proposition. Instead of wasting Ive’s time and budget designing a plastic enclosure, Apple would have impressed people more it it had slapped a free pastel sleeve in each iPhone 5 box and upsized the memory across the board. Even better, the world would have been blown away if Apple had merely dropped the price of the iPhone 5 ~$20.
… and the world waits for Mac hardware updates. We already know that Mavericks is a relatively modest software update with relatively few features that Mac power users don’t already have via 3rd party software.
The only thing holding Apple back from selling more phones is their manufacturing capacity and the number of carriers they have deals with. I’m not aware of large volumes of unsold iPhones lying around anywhere on this planet.
Apple is planning a separate product introduction in China in about two weeks. We don’t have the details yet. Possibly a different price point will be announced there through China Mobile.
Also. You forgot to mention, the iPHone 5C, 4S and 4 will probably STILL BE AVAILABLE IN CHINA.
I just checked. You can get an iPhone 4 for 2500RMB (about 300 bucks). There’s your cheap phone. Now F-off.
Apple can’t do a cheap iPhone for reasons beyond just their taste and DNA.
If Apple did an aggressive margin iPhone, it would be a disaster because demand would be higher than they could supply, so not only would they not make much money on the iPhone 5c they also would piss off everyone by not having enough to go around.
Better instead to sell as many as they can make at a more premium price and have zero gap (and actually a slight overlap) in the product lineup.
Then next year, the iPhone 5c will replace the iPhone 4s and margins will be healthy because they will have been making them for a year and can keep healthier margins.
I could be wrong, but I think this is a longterm strategy that Jobs would have approved of (and hell, he might have written this on a napkin for them two years ago).
The problem is that the 5C doesn’t look like a premium product sadly ‘celebrating plastic’ as jonny claimed is embarrassing when others are making their plastic phones look as unlike plastic as possible.