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Wednesday, September 11, 2013

Daily Report: A Cheaper iPhone? In China, It’s More Expensive

Before Apple’s introduction of the new iPhone 5C, the “C” was said to stand for “China,” “color” or “cheap” â€" reflecting the importance of the Chinese market, the bright-hued plastic body or the expected low price, Eric Pfanner reports.

While many analysts had expected Apple to price the iPhone 5C at about $400 in an effort to attract new customers in mainland China, where the company has been struggling, it will actually go for significantly more.

Apple said on its Web site that the iPhone 5C would start at 4,488 renminbi, or $733, without subsidies from mobile operators. That is not far below the price of the new flagship Apple iPhone 5S, which starts at 5,288 renminbi. Both phones were officially announced in California on Tuesday.

“If you look at the price, it’s clearly a high-end phone, not a low- or even midrange phone,” said Jenny Lai, an analyst at HSBC in Taipei, referring to the iPhone 5C.

The price is about 33 percent higher in China than the full, unsubsidized $549 cost in the United States. Chinese carriers don’t generally subsidize the handset price for consumers but they often discount their monthly bill. So the eventual cost to consumers has plenty of room to come down.

But given that Apple has been losing ground to lower-cost rivals in China, some of which make smartphones that sell for less than $100, will the 5C be able to turn around the company’s fortunes there? Read more »