Apple Launch Could Open New Market
Updated: 3:41pm UK, Tuesday 10 September 2013
By Mark Stone, China Correspondent, in Beijing
In China, Apple has two problems: price and reach.
Let's take 'reach' first. In China there are three mobile phone networks: China Unicom, China Mobile and China Telecom Corporation.
To date, Apple has only managed to establish a deal with two of them: China Unicom and China Telecom Corporation.
Given that the other carrier, China Mobile, is the world's largest network with an estimated 745 million subscribers, Apple is missing out on a huge chunk of the Chinese consumer base.
To put it simply, 745 million people are, at the moment, unable to buy an iPhone because it's not available on their network.
There have been plenty of rumours about a deal finally being signed between Apple and China Mobile. It hasn't happened yet.
The second problem for Apple in China is price. The iPhone is significantly more expensive than every other smartphone available on the Chinese market and there are many to choose from, Samsung being the biggest.
Sales of Android phones are far outstripping the sale of Apple's iPhone, making up about 90% of the Chinese market.
This is partly down to the fact that most Android phones are available on all three of the Chinese networks but it's also because they are cheaper.
Apple's share price has fallen from $700 (£446) a year ago to about $500 (£319). The problems in China are thought to be largely to blame.
A deal with China Mobile will help considerably. But a cheaper handset seems vital too.
That's where the conveniently named iPhone 5C comes in. It's not clear if the 'C' stands for 'China' (or perhaps 'cheap') but there's no doubt that it's aimed at the Chinese market.
Rumours suggest it will be plastic and available in multiple colours. That will certainly appeal to the young and upwardly mobile Chinese consumer who seems to buy increasingly gaudy phone covers.
The balance for Apple is tricky though. It likes to be seen as a premium brand - a cut above the rest perhaps.
Introducing a cheaper phone may well diminish that brand but to crack the Chinese market properly, that might be a price worth paying.
There is a strange irony here though. iPhones may be proudly "Designed in California" but they are "Made in China" to keep costs down.
Now the company finds itself having to produce a cut-price model to win over the very people who make the phones.
The Chinese, after all, seem to be the key to its future.
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