Apple's iPhone hits China with high price, without Wi-Fi

Posted:
in iPhone edited January 2014
The iPhone saw its formal debut in China Friday on carrier China Unicom, with the Wi-Fi-less hardware sold via 2,000 stores at a starting price of 4,999 yuan, or $730.



That high price was cited by The Wall Street Journal as the "buzz-killer" over the handset's debut. The high-end iPhone 3GS sells for 6,999 yuan ($1,024) without a service contract, which is how most people in China purchase their phones. The same handset can be bought for about $800 in Hong Kong.



"When wrapped together with a service plan, as is generally done in the U.S., the phone will cost Chinese subscribers at least $3,120 over two years, compared with the roughly $2,600 cost for the same period for customers in the U.S.," the report said.



The average cost of a smartphone in China is $350. And Apple must also compete with an estimated 2 million imported iPhones that were already in China as of the summer of 2009.



The cheapest iPhone runs 4,999 yuan, or $630, according to The Associated Press. And all of the officially sanctioned models come without Wi-Fi. But an imported iPhone 3GS with Wi-Fi can be bought from Chinese street markets for 5,700 yuan, or $835.



China Unicom said it hopes to have Wi-Fi in the next batch of iPhones it intends to release by the end of the year. The feature was left out of the hardware because the government's regulations temporarily banned the system in favor of a rival Chinese offering. That ban, however, was relaxed in May, after manufacturing of the new iPhone model began.



The iPhone's debut in China has been delayed not only by Chinese government regulations, but also talks with the nation's carriers. The country of over 1 billion is the largest cell phone market in the world, and one that Apple has been eager to take a crack at, despite a number of setbacks.



The agreement between Apple and China Unicom was made official in August. The non-exclusive agreement has left the door open for Apple to turn to competitor China Mobile, the world's largest wireless operator. Apple has been in negotiations with China Mobile for some time. China Mobile has 508 million wireless subscribers, while China Unicom has 143 million mobile accounts.
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Comments

  • Reply 1 of 38
    sheffsheff Posts: 1,407member
    Does anyone know why no wifi?



    Also I think that Chinese knockoffs are good enough for most in China, and the crazy price is insane, considering the phones are made there (at least I know the touches are)
  • Reply 2 of 38
    Because America doesn't have a monopoly on anti-consumer service provider demands.
  • Reply 3 of 38
    Quote:
    Originally Posted by sheff View Post


    Does anyone know why no wifi?



    Did you read the article?



    "The feature was left out of the hardware because the government's regulations temporarily banned the system in favor of a rival Chinese offering known as BDA."
  • Reply 4 of 38
    Fail.
  • Reply 5 of 38
    dluxdlux Posts: 666member
    Quote:

    China Unicom said it hopes to have Wi-Fi in the next batch of iPhones it intends to release by the end of the year.



    So the first batch is generally acknowledged to be a counter-productive waste of effort?
  • Reply 6 of 38
    john.bjohn.b Posts: 2,713member
    The finance.yahoo.com link is a 404.



    I'm shocked that Apple did any iPhone hardware modifications just to get into China.



    And I'm more shocked that the Chinese dictators didn't demand the camera get removed as well:



  • Reply 7 of 38
    john.bjohn.b Posts: 2,713member
    Quote:
    Originally Posted by tonton View Post


    Did you read the article?



    "The feature was left out of the hardware because the government's regulations temporarily banned the system in favor of a rival Chinese offering known as BDA."



    BDA is actually BDA China Ltd., a Beijing-based technology research firm. From the AP article:



    Quote:
    Originally Posted by From the original AP story


    Unicom's iPhones lack WiFi because it was temporarily banned by Beijing, which was promoting a rival Chinese system, according to BDA. The ban was relaxed in May after manufacturing had begun.



    Did you read the article? AI didn't! But Mac Rumors did.
  • Reply 8 of 38
    wigginwiggin Posts: 2,258member
    Quote:
    Originally Posted by John.B View Post


    BDA is actually BDA China Ltd., a Beijing-based technology research firm. From the AP article:







    Did you read the article? AI didn't! But Mac Rumors did.



    So basically, the government banned wi-fi to cripple the iPhone and give a leg up to BDA? Talk about home field advantage!
  • Reply 9 of 38
    john.bjohn.b Posts: 2,713member
    Quote:
    Originally Posted by Wiggin View Post


    So basically, the government banned wi-fi to cripple the iPhone and give a leg up to BDA? Talk about home field advantage!



    No, BDA is like the Chinese version of Gartner. They do technical analysis for publications too lazy to do their own research and need to have their "facts" spoonfed to them.



    The Chinese government banned WiFi for a competing standard that, IMO, probably is easier for them to monitor and block should another Tiananmen event ever break out...
  • Reply 10 of 38
    Officially the government banned wifi to 'stimulate the economy', the idea being that without wifi people would spend more on mobile data.



    Often the government also have ownership of certain companies with technology in a particular area. So if there is an alternative Chinese 'home grown' (see home copied) version of wifi, and if the government have a stake in the companies that developed this technology, then they'll ban wifi to make their own companies perform better.



    A similar thing occured with 3G LTE, with the government instead pushing TD-SCDMA. Everyone knows that this is pretty much a failure, so now they're pushing 3G LTE TDD, which is a bizarre version of 3G LTE that will be incompatible with the version used in every other country. All other countries sensibly use 3G LTE FDD (frequency division duplexing) instead of the weird TDD version being pushed in China.



    Oh well....
  • Reply 11 of 38
    Here is a more accurate read on CHU IPhone pricing! The Apple Bashers are really hard at work!

    ************************************************** **********************



    ¶ BEIJING (Dow Jones)--China Unicom (Hong Kong) Ltd. (CHU) said Tuesday that Chinese customers who select the most expensive service plans under a two-year contract can receive the Apple Inc. (AAPL) iPhone for free.



    ¶ Customers who sign up for the priciest monthly plan, at CNY886 per month ($130) for two years, will get the top-end 32-gigabyte iPhone 3Gs for free, as opposed to the retail price of around CNY5,000, ($732) the company said.



    ¶ However, under that plan, customers must be willing to pre-pay their monthly bills by putting down a hefty deposit of CNY7,999 ($1,170).



    ¶ By contrast, the equivalent phone in the U.S. sells for $299, with a two-year service plan that ranges from around $45 to $120 a month, including text messaging.



    ¶ Thus the total cost of ownership over a two-year period for a top-end iPhone will be similar in China and the U.S. The priciest plan in the U.S. offers unlimited calls and texting, while the top-end plan from China Unicom still limits calls and messages, albeit at a generous 3,000 minutes per month for calls.



    ¶ -By Aaron Back, Dow Jones Newswires; (8610) 6588-5848; aaron.back@dowjones.com
  • Reply 12 of 38
    solipsismsolipsism Posts: 25,726member
    1) No one outside the China has the right to bitch about their phone price and service plan now.



    2) The WiFI thing is well known and I’m glad it’ll be dropped soon. I’m surprised that Apple didn’t wait to release these phones until it was dropped. Unless….



    3) Unless they didn’t remove the WiFi chip (which also contains the Bluetooth 2.1 + EDR + FM). That seems costly to do when the chip itself it cheap. If they were allowed I’d reckon they’d just not include the driver or UI elements for the WiFI, but can add them later in an update after this silly WiFI ban for cellphones is over.



    4) Apple surely knows the market better than I do, but I have to wonder about the pricing. If a more functional device can be had for less money on the grey market why not go with that? I wonder if the high price of the device will build in an elitist market, making it even more of a status symbol. Will we see a price drop after a few months?
  • Reply 13 of 38
    addaboxaddabox Posts: 12,667member
    How does China plan to become a global superpower if they're going to adopt oddball, "homegrown" versions of international standards?



    My impression is that China remains fairly insular and arrogant, regarding the ascendancy of the west as an unfortunate anomaly, but I would think simple pragmatism would steer them clear of doing something as loopy as trying to drive an alternative to WiFi.



    At some point, the enormous conflicting forces at play in China today are going to explode.
  • Reply 14 of 38
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by solipsism View Post


    4) Apple surely knows the market better than I do, but I have to wonder about the pricing. If a more functional device can be had for less money on the grey market why not go with that? I wonder if the high price of the device will build in an elitist market, making it even more of a status symbol. Will we see a price drop after a few months?



    I think a lot of that price jump is taxes. In countries like China and India, official white goods products are much more expensive than gray market imports --- because import duties are very high.



    Even though the iphone is manufactured in China, they are manufactured in "special economic zones" that have aimed at making products to export overseas --- and I bet that these chinese-made iphones are still subject to high import duties when they "re-enter" China.
  • Reply 15 of 38
    I still think Apple has a good thing going in China, assuming earlier rumors of a $450 ASP are not true. Selling a million units there thus quarter should be easy, and 2-3mm within the range of possibility.



    The idea that wifi functionality is just firmware disabled is interesting, but if it were the US, I would think they would need regulatory approval numbers to match approved features. Who knows; maybe they will leak a hack to enable wifi...
  • Reply 16 of 38
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by addabox View Post


    How does China plan to become a global superpower if they're going to adopt oddball, "homegrown" versions of international standards?



    My impression is that China remains fairly insular and arrogant, regarding the ascendancy of the west as an unfortunate anomaly, but I would think simple pragmatism would steer them clear of doing something as loopy as trying to drive an alternative to WiFi.



    At some point, the enormous conflicting forces at play in China today are going to explode.



    There are plenty of people on this forum who advocates that the US government should force all the carriers to have a single standard.



    The fact is that these kinds of government intervention doesn't work. South Korean government is still pushing their carriers to deploy the South Korean version of wimax (called wibro) instead of LTE.



    http://www.telegeography.com/cu/arti...399&email=html



    Japan had a Japan-only 2G mobile telephone system.
  • Reply 17 of 38
    cnocbuicnocbui Posts: 3,613member
    Apple: We want to sell the iPhone in China.



    Government Official: Take the WiFi out first.



    Apple: No, that would be against the interests of the users experience, we could instead cease having any Apple devices manufactured in China permanently and have them all made in Taiwan instead, if you like.



    Government Official: When would you like to start shipping?
  • Reply 18 of 38
    samabsamab Posts: 1,953member
    Quote:
    Originally Posted by cnocbui View Post


    Apple: We want to sell the iPhone in China.



    Government Official: Take the WiFi out first.



    Apple: No, that would be against the interests of the users experience, we could instead cease having any Apple devices manufactured in China permanently and have them all made in Taiwan instead, if you like.



    Government Official: When would you like to start shipping?



    Except chinese wages are 100 times cheaper than in taiwan. And the factories that are manufacturing the iphones are Taiwanese-owned companies.
  • Reply 19 of 38
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by addabox View Post


    At some point, the enormous conflicting forces at play in China today are going to explode.



    Yes, but not probably not until well after they have the world?s largest GDP. Wait until an internal breakdown ricochets though the world?s economy then. It will make the last recession seem like nothing. (speculation)





    Quote:
    Originally Posted by samab View Post


    I think a lot of that price jump is taxes. In countries like China and India, official white goods products are much more expensive than gray market imports --- because import duties are very high.



    Good point. I wonder if we?ll see the grey market sellers raise their prices or if they have to much competition within themselves to be able to.





    Quote:
    Originally Posted by aaarrrgggh View Post


    IThe idea that wifi functionality is just firmware disabled is interesting, [?] Who knows; maybe they will leak a hack to enable wifi...



    From iFixit?
  • Reply 20 of 38
    I'm surprised that we are surprised by any of this.



    I love apple products and have for years. They maintain a real 'counter culture, cool, rebel' image merely because of their major competitor, but at the end of the day they will make the deal to increase the stock price.



    They bowed to the Chinese government to get their product in play and in doing so, sacrificed user experience and integrity. So be it.



    I am more disturbed by the bad pricing decision. From a market dominance standpoint I'd imagine they would have wanted to try and push the grey market products out, not give them a leg up. Maybe there is a strategy at work here I don't understand.



    Any economists on the blog?
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