Apple's iPhone 5s and 5c to receive significant subsidies from Chinese carriers

Posted:
in iPhone edited January 2014
Newly-released rate cards from China Unicom and China Telecom reveal that Apple's newest handsets will hit the street for significantly less than their sticker prices.

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As the Chinese market becomes increasingly important for Apple, the company's carrier partners in the middle kingdom have advertised steep subsidies on the new flagship iPhone 5s and 5c, according to information obtained by ISI and reported by Fortune's Apple 2.0 blog.

China Unicom and China Telecom, the nation's second- and third-largest wireless carriers, will each offer multiple plans in which customers can receive an iPhone 5s or 5c for free in exchange for signing a long-term contract. In typical fashion for Chinese handset subsidies, customers will pay the full price of the device up front and receive a prorated portion of the cost back each month in the form of a discount on their wireless bill.

Japanese carriers NTT DoCoMo ? Apple's newest carrier partner in Asia ? KDDI and Softbank similarly offer plans that give customers a new iPhone for free when signing a long-term contract.

The subsidies may help to assuage investors' fears that the lower-cost iPhone 5c is not inexpensive enough for the still-developing Chinese market. The relatively high cost of the new iPhone, coupled with Apple's lack of transparency about preorder numbers, has caused analysts to downgrade Apple's stock outlook and triggered a steep decline in shares of the Cupertino company.
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Comments

  • Reply 1 of 49
    rogifanrogifan Posts: 10,669member
    But wait...I thought both WSJ and Bloomberg reported the Chinese carriers were cutting their subsidies making people pay more up front. Which is correct?
  • Reply 2 of 49
    CU and CT are doing some preemptive pricing here. A sure sign that China Mobile is on its way.
  • Reply 3 of 49
    rogifanrogifan Posts: 10,669member
    CU and CT are doing some preemptive pricing here. A sure sign that China Mobile is on its way.

    http://www.marketwatch.com/story/techs-rally-but-apple-falls-on-china-news-2013-09-16
  • Reply 4 of 49
    wovelwovel Posts: 956member
    Lack of transparency about pre-order numbers? Do they ever downgrade every other phone manufacturer in the world for the same thing? It is hard to imagine analysts can get more ridiculous, but I bet they can.
  • Reply 5 of 49
    iphone is expensive , they said /s
  • Reply 6 of 49
    wovelwovel Posts: 956member
    rogifan wrote: »
    CU and CT are doing some preemptive pricing here. A sure sign that China Mobile is on its way.

    http://www.marketwatch.com/story/techs-rally-but-apple-falls-on-china-news-2013-09-16

    Not sure what your link has to do with the post you responded to. I will point out that that story was based on speculation (and blatant market manipulation) and has been contradicted since CT released their rate card...
  • Reply 7 of 49
    Quote:
    Originally Posted by Palstreet View Post

    iphone is expensive , they said /s

     

    It is, that's why the carriers are subsidizing it lol. They know that their customers really want it, so they're locking them into long-term contracts in exchange for the subsidy.
  • Reply 8 of 49
    So Apple knew more about their business than the analysts?? Yeah right.

    /s
  • Reply 9 of 49
    herbapouherbapou Posts: 2,199member
    [QUOTE]will each offer multiple plans in which customers can receive an iPhone 5s or 5c for free in exchange for signing a long-term contract. In typical fashion for Chinese handset subsidies, [B]customers will pay the full price of the device up front and receive a prorated portion of the cost back each month [/B]in the form of a discount on their wireless bill.[/QUOTE]

    WTF is that crap? Paying full price and getting lower monthly plan is the textbook definition of [B]NO[/B] subsidies... This is exactly what I do with a unlock phone here in Canada. If they have to pay full price up front a lower cost phone would do much better. This doesnt make any sense to me.

    edit: From what I see on other sites, they get a much lower monthly plan with a high price phone than if they get a $99 phone. This is one wierd system, its subsidies in reverse... I like it... I would do that actually because in the end you pay less than american plans, but you need to have cash up front.
  • Reply 10 of 49
    rogifanrogifan Posts: 10,669member
    wovel wrote: »
    Not sure what your link has to do with the post you responded to. I will point out that that story was based on speculation (and blatant market manipulation) and has been contradicted since CT released their rate card...
    Ah, well if WSJ was wrong then that's good. I do wish Apple would do a better job of responding to this stuff. Yeah I get not responding to rumors about new products/services but if the WSJ claims a carrier is cutting their subsidy and that information is false I wish Apple would say so. The stock was down over 3% yesterday in part because of this story from the WSJ.
  • Reply 11 of 49
    rogifanrogifan Posts: 10,669member
    freshmaker wrote: »
    <div class="quote-container"><span>Quote:</span><div class="quote-block">Originally Posted by <strong>Palstreet</strong> <a href="/t/159571/apples-iphone-5s-and-5c-to-receive-significant-subsidies-from-chinese-carriers#post_2398661"><img src="/img/forum/go_quote.gif" class="inlineimg" alt="View Post"/></a><br/><br/>iphone is expensive , they said /s</div></div><p> </p>

    It is, that's why the carriers are subsidizing it lol. They know that their customers really want it, so they're locking them into long-term contracts in exchange for the subsidy.
    And it seems Apple is doubling down on the subsidy model. I wish they weren't as I think the trend going forward is not to be tied to long term carrier contracts.
  • Reply 12 of 49
    I hope Peter Misek of Jefferies chokes on a bone. That dude spread far too much anti-Apple FUD for his own good. That's OK as long as Apple has been buying back shares since this $50 drop in Apple share price. Guys like Peter Misek should be investigated for suspicious of Apple's share price manipulation by giving out erroneous information to investors. The SEC really should investigate the motives of analysts who make up numbers to fit their own conclusions before any actual product sales take place. I feel that these brokers should at least be fined once the information they've given out proves to be incorrect. At least they wouldn't be so frivolous about making quick judgment calls and would be required to take some responsibility for their actions.
  • Reply 13 of 49

    The iPhone 5s is sold out in China.

  • Reply 14 of 49

    Year over year, we read that Apple had dropped in popularity in China, so this news sounds pretty awesome.

  • Reply 15 of 49
    I hope Peter Misek of Jefferies chokes on a bone. That dude spread far too much anti-Apple FUD for his own good. That's OK as long as Apple has been buying back shares since this $50 drop in Apple share price. Guys like Peter Misek should be investigated for suspicious of Apple's share price manipulation by giving out erroneous information to investors. The SEC really should investigate the motives of analysts who make up numbers to fit their own conclusions before any actual product sales take place. I feel that these brokers should at least be fined once the information they've given out proves to be incorrect. At least they wouldn't be so frivolous about making quick judgment calls and would be required to take some responsibility for their actions.

    So if someone could summarize all of the what this t_urd has been doing, we could all inundate the SEC with emails asking for an investigation. If enough people do so, I bet someone would pay attention.
  • Reply 16 of 49
    Quote:
    Originally Posted by Wovel View Post





    Not sure what your link has to do with the post you responded to. I will point out that that story was based on speculation (and blatant market manipulation) and has been contradicted since CT released their rate card...

     

    Rogifan is deliberately spreading doom and gloom FUD. Almost every story about the 5s or 5c contain FUD posts from him.

  • Reply 17 of 49

    But… but… APPLE IS DOOMED!

  • Reply 18 of 49
    512ke512ke Posts: 763member
    Wow. The WSJ Bloomberg Matketwatch Seeking Alpha Mötley Fool LA Times didn't just get it wrong they loudly trumpeted that the iPhones were an overpriced flop DOA in both China and the USA.

    Apple should sue them for slanderously tanking their share price.

    Analysts should be fired. News organizations should contritely apologize and institute improvements in their shoddy muckraking slash so called journalism.

    Crickets.
  • Reply 19 of 49
    jungmarkjungmark Posts: 6,532member
    rogifan wrote: »
    But wait...I thought both WSJ and Bloomberg reported the Chinese carriers were cutting their subsidies making people pay more up front. Which is correct?

    I thought analysts are never wrong. Just goes to show you that you can't trust every thing you read unless it came from the horse's mouth. And we know Apple doesn't comment in rumors.
  • Reply 20 of 49
    Quote:

    Originally Posted by 512ke View Post



    Wow. The WSJ Bloomberg Matketwatch Seeking Alpha Mötley Fool LA Times didn't just get it wrong they loudly trumpeted that the iPhones were an overpriced flop DOA in both China and the USA.



    Apple should sue them for slanderously tanking their share price.



    Analysts should be fired. News organizations should contritely apologize and institute improvements in their shoddy muckraking slash so called journalism.



    Crickets.

    You know, if you have an estimate of AAPL's actual value, these analysts might actually be helping you. They're pushing the stock down. Now's the chance to buy before the next wave.

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