Survey finds China's 'sweet spot' for Apple 'iPhone 5C' priced at $486
A new survey of smartphone buyers in China has found that the pricing "sweet spot" for Apple's rumored "iPhone 5C" is $486 ? a price higher than the analyst responsible for the poll expected.
Source: AlphaWise & Morgan Stanley Research
Katy Huberty of Morgan Stanley revealed the results of the AphaWise survey on Tuesday, based on 2,000 Chinese handset users in the nation's largest cities. The data shows that customers in "tier 1-2 cities" are increasingly planning to purchase more expensive smartphone models, signaling a benefit to both Apple and Samsung.
But if Apple were to introduce a new, lower priced iPhone model, as the company is expected to do, the survey found that it could gain 13 points of smartphone purchase intent share in China. That would push Apple from a 23 percent share to 36 percent among future smartphone buyers, potentially pushing it beyond Samsung which is seen as falling to a 30 percent share in that scenario.
Respondents to the survey indicated on average that they are willing to pay $486 U.S., or 4,000 RMB, for a so-called "iPhone 5C" that is unlocked and contract-free. That number was higher than what Chinese customers are willing to pay for a Samsung Galaxy S4 Mini (2,600-3,800 RMB) or HTC One Mini (2,000-3,000 RMB).
The $486 that Chinese customers would reportedly pay for an "iPhone 5C" comes in 22 percent higher than Huberty's estimated price of $399 for the anticipated smartphone. She believes this signals that Apple could gain even more market share than the survey indicated, or that the company could obtain even higher margins than expected on the device.
The poll also found that an "iPhone 5C" wouldn't even need to have high-speed 4G LTE to satisfy most potential customers. Among the respondents, 68 percent said they would be fine with a 3G model, while just 18 percent said they were interested in an "iPhone 5C' with 4G LTE.
Apple is expected to introduce a new iPhone model with a plastic back, using many of the same internal components as the iPhone 5, at a media event on Sept. 10. That device, rumored to be called the "iPhone 5C," is presumed to be joined by a new flagship model, referred to by the media as an "iPhone 5S."
Source: AlphaWise & Morgan Stanley Research
Katy Huberty of Morgan Stanley revealed the results of the AphaWise survey on Tuesday, based on 2,000 Chinese handset users in the nation's largest cities. The data shows that customers in "tier 1-2 cities" are increasingly planning to purchase more expensive smartphone models, signaling a benefit to both Apple and Samsung.
But if Apple were to introduce a new, lower priced iPhone model, as the company is expected to do, the survey found that it could gain 13 points of smartphone purchase intent share in China. That would push Apple from a 23 percent share to 36 percent among future smartphone buyers, potentially pushing it beyond Samsung which is seen as falling to a 30 percent share in that scenario.
Respondents to the survey indicated on average that they are willing to pay $486 U.S., or 4,000 RMB, for a so-called "iPhone 5C" that is unlocked and contract-free. That number was higher than what Chinese customers are willing to pay for a Samsung Galaxy S4 Mini (2,600-3,800 RMB) or HTC One Mini (2,000-3,000 RMB).
The $486 that Chinese customers would reportedly pay for an "iPhone 5C" comes in 22 percent higher than Huberty's estimated price of $399 for the anticipated smartphone. She believes this signals that Apple could gain even more market share than the survey indicated, or that the company could obtain even higher margins than expected on the device.
The poll also found that an "iPhone 5C" wouldn't even need to have high-speed 4G LTE to satisfy most potential customers. Among the respondents, 68 percent said they would be fine with a 3G model, while just 18 percent said they were interested in an "iPhone 5C' with 4G LTE.
Apple is expected to introduce a new iPhone model with a plastic back, using many of the same internal components as the iPhone 5, at a media event on Sept. 10. That device, rumored to be called the "iPhone 5C," is presumed to be joined by a new flagship model, referred to by the media as an "iPhone 5S."
Comments
If Apple prices the 5C at $450 as analyst seem to be estimating now we can pretty much say game over for Samsung and other Android manufacturers.
If Apple is bold and prices the 5C below $400 then the skies the limit for iPhone sales. Hopefully they'll be able to keep up with demand!
That's TOO MUCH for me
So... the 5C is a "real" product?
(at least the article said "rumored".)
Appears to be more "sour" than "sweet" based upon the above posts.
Quote:
Originally Posted by Grand Prick
That's TOO MUCH for me
Quote:
Originally Posted by Wurm5150
It needs to be lower than that to really crack China open for Apple.
The so-called "sweet spot" is the result of a survey of the Chinese market. Potential buyers were asked what price they would pay for an iPhone and $486 is what they considered okay. It's not what Apple was planning to charge IF the thing even exists. Chinese consumers are no different than the rest of the world. A certain segment will always choose the cheapest option no matter what brand or features. If it's the cheapest they will buy it. Apple has never been interested in that market and I hope never will be. That would sully and cheapen the brand.
And no matter what you two think or say there will always be a very large market of consumers who want quality over price. It's why premium brands exist and continue to thrive even when the economy tanks. Are you envious that some can afford finer things than you? Android is for for cheapsters and that's why they sell the most, not the best.
Quote:
Originally Posted by jwdawso
Current iPod Touch 32GB is $299, then add in the cellular for $130 like on the iPad, gives $429. Now with a lower cost materials, $399 seems doable.
We didn't know you were an industrial engineer. Really? Just throw around some meaningless numbers and come up with a price that suits you? Really?
Quote:
Originally Posted by lkrupp
No reading comprehension, huh? Didn't learn to understand what you read in elementary school?
Someone didn't have their bran this morning.
What the hell is the matter with you? You felt the need to attack someone for stating an opinion? You should stop being a douche and maybe you'll get some perspective of what other people think and feel.
Regardless of whether it's $399 or $450, at least they finally seem to be talking about a number that's achievable. I can easily see Apple hitting something in that range. When they were talking about $200 as a target, it didn't seem even remotely plausible.
But..But...Samsung..
And this you know how?
Of course, from the data providced, what survey respondents are willing to pay for a phone, what they think is too expensive, is only part of the equation for the appropriate pricing scheme that Apple will implement. The so-called "sweet spot" in the AlphaWise "analysis" ignores the cost of manufacture and the profit margin needed by the seller and the supply chain (resellers). If pricing was based upon only the customer's willingness to pay, then everything would be free. And Apple would be no more profitable than Nokia or Blackberry or HTC.
Quote:
Originally Posted by lkrupp
We didn't know you were an industrial engineer. Really? Just throw around some meaningless numbers and come up with a price that suits you? Really?
You are right - there's a lot you don't know about me!
I remain unclear about this (and have seen no lucid, irrefutable rationalization anywhere): What is it about 5C that will win over more Chinese customers (or India, Russia and other places where iPhone is less than dominant) than 4 or 4S? I don't think it will be much cheaper than those two? And if it will be cheaper, what will Apple sacrifice to hit the lower price points? Are they simply sacrificing margins? If so, why not just sacrifice greater margins on 4 and 4S?
Is it just the illusion that they are getting a new, cheaper iphone rather than last year's iphone?
Or is it because iPhone 4 are 4S are being both retired and the current iPhone 5 will become the only "older" model, but they still want/need 3 models in their lineup? With the 5, 5C and 5S, they will have 3 phone models with the same screen size and connector. Is that the rationale?
And what about next year? Will they market 4 models - 5C, 5S, 6 and 6C? What will the successor to 6C be called when they release 6S in 2015?
Quote:
Originally Posted by sog35
$399 is the sweet spot after adding taxes it will be $450 in China
Taxes affect all handset manufacturers, so it's probably not much of a differentiator. All a company can really control -- relative to the competition -- is the base price.