iPhone 5C called too expensive in China

Apple’s new affordable iPhone 5C handset has been branded too expensive in China after the company priced the device at almost £500.

Apple was expected to price its cheaper handset at approximately $400 [£253] to try and appeal to consumers in emerging markets with China a key component of this.

Instead, the “cut-price” device has been priced up at 4,488 yuan [£463] for a sim-free version on the Apple website, which is only just cheaper than the top of the range iPhone 5S that is 5,288 yuan [£546].

“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, told the New York Times.

One thing that should be taken into consideration is that most Chinese carriers don’t subsidise any of the cost of the handset and instead pass on substantial discounts through the monthly price plans given to customers. Even taking this into account, the price of the device is still large and caused a number of Apple supplier share prices to fall. Analysts are speculating this is due to fears that sales won’t reach the anticipated levels.

“If they had been able to get down in the $350 [£221] to $400 [£253] range, we would have seen a big bump in the fourth quarter. They’ll still get a bump, but this would have accelerated it,” said Francis Sideco, an analyst at IHS, a research firm.

Apple could struggle to compete with other companies in the Chinese smartphone market, including Huawei and newcomer Xiaomi, with other company’s devices costing less than half the price of the iPhone 5C even before the network discounts are considered.

The iPhone 5C, that was unveiled alongside the iPhone 5S yesterday, is available in five different colours and is very similar to the now discontinued iPhone 5.