Analyst: Weaker than expected iPhone 5c sales may trigger China Mobile renegotiation

“Sales of Apple’s less-expensive iPhone 5c may be holding up an anticipated China Mobile deal, says KGI analyst Ming-Chi Kuo, but negotiations are likely nearing an end point,” Mikey Campbell reports for AppleInsider.

“According to a research note obtained by AppleInsider, Kuo believes the much-rumored China Mobile partnership will generate 15 to 20 million iPhone unit shipments in 2014, which will jump to 20 to 30 million the year following,” Campbell reports. “The analyst notes, however, that the actual numbers depend on Apple’s strategy in midrange and low-end products.”

“The analyst’s latest surveys indicate that demand for a TD-LTE version of the iPhone 5c, which is compatible with China Mobile’s unique 4G network infrastructure, has declined ‘dramatically’ over the past weeks. Subscribers are now focused on the more expensive iPhone 5s, Kuo says,” Campbell reports. “This is apparently well below Apple’s original production plan and would possibly require a renegotiation with the world’s largest wireless provider. ”

Read more in the full article here.

MacDailyNews Take: Oh, what a “problem” to have, having customers upselling themselves en masse to your flagship model!

Why the hell would anyone buy an iPhone 5c instead of an iPhone 5s?

It seems to me that Apple is using the iPhone 5c as a tool to push buyers to the 5s (well, at least those buyers who can grasp a simple value equation).

Once Apple gets the customer to the websites or into the stores and the prospective buyer can see and/or hold both phones and learn that they’re only separated by a mere $100, my guess is that Apple figures they’ll have plenty of upsales occurring. Upsales that will boost Apple’s iPhone margins nicely.SteveJack, MacDailyNews, September 10, 2013

Related article:
Why would anyone buy an iPhone 5c instead of an iPhone 5s? – September 10, 2013

15 Comments

  1. Rival manufacturers can only dream of having phones that sell in the sort of numbers that the 5C does. If sales of the 5C are regarded as disappointing, then what must the feeling be about all those phones ( pretty much every other phone ) that sell in lesser numbers ?

      1. My take: This is a hit piece to curry a more favorable deal from Apple. China Mobile is the NTT Docomo of China.

        Sales of the 5C make absolutely no different to Apple.

  2. The iPhone 5C unfortunately has not taken off in markets outside the U.S. where phones are not bought on contract but are paid for upfront. The price differential of $100 is almost like slap in the face for cheap plastic.

    Most people who can afford to pay for a phone upfront will opt for the 5S. The 5C is dead in the water as far as China is concerned. And the plastic back makes it particularly cheap looking and unattractive to Asian consumers when compared to the anodised aluminium back of the 5S for which they would rather pay the $100 premium.

    1. The iPhone 5C is anything put cheap plastic. It’s the highest quality plastic available in any consumer technology device. It does not feel or look cheap in your hands.

      Nonetheless, people choosing the 5S over the 5C is not a problem for Apple. It’s what they would prefer! As long as people are buying an iPhone, Apple doesn’t care which one. It’s just a bonus they’re flocking to the most expensive ones.

  3. Choices, choices, choices, … Spending over $2,000 in the next 2 years to use this device. So, $100 gives me 64-bit chip with twice the speed, bio-security, adult looking, better wireless, better camera, … Over 24 months that is $4.17 a month. So, how much is the decked out iPhone 5S with the max memory, power and speed.

    Oh, your only issue is gold, white or black/grey. Where does the $4.17/month question elude any customer?

  4. The principle tactic in Chinese negotiation, especially when dealing with Americans, is to delay until until the adversary’s lack of patience forces them to concede. This has nothing to do with the 5c, especially obvious since 5c sales are driving higher sales of the higher margin phones.

    1. ahem, spelling police
      principal

      I don’t know much about Chinese negotiating techniques, but like other markets, having iPhones to sell has shown to bump up subscriber rates dramatically. I think both sides at the negotiating table recognize this.

      1. Where were you when I really needed you? Authored an email a little while ago. Meant to say, “can’t meet with you today” instead I wrote “can’t meet with you toady.”

  5. Less 5C’s means more 5S’s. It will be interesting to see how China Mobile and Apple sort this out. Clearly each will try to use it to their advantage. And it should be positive for both. It should be a win, win situation. Unless somehow the 5C was meant to help China Mobile more than the 5S? I’m sure these are difficult and complex agreements. Let’s face it, we’re dealing with communists. That’s not AT&T!

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