'iPhone 5C' Projected to Give Apple Huge Boost in China

While Apple has experienced tremendous growth in China over the past several years and the market is now responsible for approximately 15% of Apple's revenue each quarter, Apple's momentum has slowed there recently with the most recent quarter seeing a 14% decline in revenue in China year-over-year.

A Morgan Stanley analyst team led by Katy Huberty released a bullish new report yesterday suggesting, however, that Apple's rumored lower-cost "iPhone 5C" could spark a surge in consumer interest for Apple in China. According to a survey of 2,000 Chinese consumers in "Tier 1-2" cities, an iPhone 5C could lead to a 13-point smartphone market share boost for Apple in China, with a rumored China Mobile deal potentially adding another six points. Combined, those two scenarios could push Apple to a 36% share of the market in those cities, taking the lead from Samsung.

Apple could significantly disrupt the Chinese smartphone market by launching iPhone 5C. We asked respondents that are very likely to purchase smartphones in the next 12 months but did not choose the iPhone whether they would purchase a redesigned and lower-priced iPhone 5C, one of the “Mini” products from international brands, or a comparable smartphone from one of China’s domestic brands. The survey indicates Apple could gain 13 points of unit share with iPhone 5C. About half of that share gain would come from Samsung, while most other vendors lose some share.

morgan_stanley_iphone_china_2013
According to the survey, the "sweet spot" for pricing on the iPhone 5C among Chinese consumers is around RMB 4000 ($486), significantly higher than Morgan Stanley's estimated $399 pricing for the device, suggesting that consumers there will generally be satisfied with the iPhone 5C as a mid-range device rather than Apple needing to compete at low-end price levels.

Morgan Stanley's results also show that two-thirds of potential iPhone 5C customers would be happy with a 3G device, as 4G networks have yet to see widespread deployment in many areas of China. The data suggests that Apple could boost profit margins and increase differentiation with the iPhone 5S by not supporting 4G LTE on the iPhone 5C, although the company's plans for the iPhone 5C in countries where 4G LTE is more prevalent could drive Apple to support the faster networks.

Apple is expected to unveil the iPhone 5S at a media event on September 10, with the iPhone 5C most likely appearing at the same event.

Related Forum: iPhone

Top Rated Comments

Erphern Avatar
102 months ago
Ya know, stuff like this really bothers me. A cheap plastic iPhone does not represent Apples Culture/DNA. Apple is a premium brand! If Steve was alive, he would never allow a cheaper plastic iPhone with the sole purpose of gaining market share. I feel that Tim Cook and his executives are losing sight of what's truly important. Not only that, I feel that they are losing sight of Steve's remarkable vision for Apple.

Troll level: expert.
Score: 20 Votes (Like | Disagree)
Rogifan Avatar
102 months ago
iPhone C(heap Plastic)
I wonder when people will figure out they're neither clever nor funny with these comments.
Score: 15 Votes (Like | Disagree)
Rogifan Avatar
102 months ago
Ya know, stuff like this really bothers me. A cheap plastic iPhone does not represent Apples Culture/DNA. Apple is a premium brand! If Steve was alive, he would never allow a cheaper plastic iPhone with the sole purpose of gaining market share. I feel that Tim Cook and his executives are losing sight of what's truly important. Not only that, I feel that they are losing sight of Steve's remarkable vision for Apple.
Oh boy here we go again. Were the 3G and 3GS cheap plastic?

Oh and how about this?

Score: 13 Votes (Like | Disagree)
cameronjpu Avatar
102 months ago
yet, another news dedicated to China...


news about the new iphone, fine

news about the new iphone for China, i don't care :rolleyes:

You care enough to talk about it, which makes them money (ad impressions). If you truly don't care and want to send that message, then don't post on the thread.
Score: 12 Votes (Like | Disagree)
Rogifan Avatar
102 months ago
Wow. Times have changed since the 80s/90s buddy.

iPhone 3G/3GS?
Score: 4 Votes (Like | Disagree)
Roessnakhan Avatar
102 months ago
Ya know, stuff like this really bothers me. A cheap plastic iPhone does not represent Apples Culture/DNA. Apple is a premium brand! If Steve was alive, he would never allow a cheaper plastic iPhone with the sole purpose of gaining market share. I feel that Tim Cook and his executives are losing sight of what's truly important. Not only that, I feel that they are losing sight of Steve's remarkable vision for Apple.

And prior to 2007 most of Apple's products were plastic. Are all those against Apple Culture/DNA/Premium-ness?
Score: 4 Votes (Like | Disagree)

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