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.
Photo: Reuters
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.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
RSS