Chinese Web users yesterday dismissed the “low-cost” iPhone 5C as too expensive, raising questions over Apple’s ability to build up sales in the world’s biggest mobile market.
The iPhone 5C is part of the US firm’s bid to counter cheaper handsets from rivals, particularly in China, where it has only a 5 percent share of the smartphone market.
However, the new phone will retail in China for 4,488 yuan (US$733) for the 16GB version, according to Apple’s China online store, making it only marginally cheaper than the previous model, the iPhone 5.
It is also well above the US$549 that an unlocked iPhone 5C will sell for in the US.
The top-line iPhone 5S starts at 5,288 yuan in China, whereas the unlocked US equivalent is US$649.
“I thought the cheap 5C version would be priced at one thousand or two [yuan]... I can’t sell my kidney for this much,” said one poster on Sina Weibo, referring to a teenager who sold a kidney to buy an iPhone and iPad last year.
“So this is the so-called cheap version? The 5C starts at 4,488 yuan in China. Haha, they treat the Chinese as peasants,” another said.
With a network contract in the US, the iPhone 5C can cost as little as US$99.
However, unlike in North America or Europe, Chinese networks do not offer contract customers deep discounts on handsets, instead requiring a substantial upfront payment, which is then refunded over the course of the agreement.
The new iPhone was launched globally at Apple’s Silicon Valley headquarters in California on Tuesday. The top-line iPhone 5S has a speedier chip that puts computing performance on par with desktop machines. Apple introduced a fingerprint sensor for the iPhone 5S as a new security measure in place of passwords.
“The business has become so large that this year we are going to replace the iPhone 5 and we are going to replace it with two new designs,” Apple chief Tim Cook announced at the company’s Silicon Valley headquarters.
Apple will begin taking orders tomorrow, and on Friday next week the two devices will go on sale in the US, Australia, Britain, China, France, Germany, Japan and Singapore.
Apple also held a media event in Beijing yesterday after speculation that a deal with China Mobile (中國移動), the country’s biggest carrier, was to be revealed.
However, there were no major announcements at the event, where a translated film of Apple’s unveiling in Cupertino was shown.
Apple announced separately a deal with Japan’s biggest mobile phone carrier NTT DoCoMo to bring the two new iPhones to that country.
China Mobile has more than 700 million subscribers, according to Barclays Equity Research. Apple’s iPhones are currently available in China on long-term contracts with smaller wireless companies.
Many domestically made smartphones are priced as low as US$100 in China, which remains one of Apple’s largest markets due to the popularity of its various products. However, Apple’s total sales in China in the most recent quarter slipped 14 percent from a year ago to US$4.6 billion.
While iPhones are popular among China’s better off, analysts believe current prices would need to drop substantially for Apple to seriously penetrate the middle-income market.
“The 5C is a no-compromise device,” Gartner analyst Van Baker said after trying out Apple’s new phones. “It is just in a plastic case instead of a metal case, and they basically reduce the price by the cost of materials.”
Baker said it was an “open question” whether the price cut for the iPhone 5C would be enough to attract customers in emerging markets.
“Anyone expecting Apple to come truly down-market with the iPhone 5C was fooling themselves,” Ovum analyst Tony Cripps said.
“The day that happens is the day the company signals that it has run out of headroom for expansion,” he said.