The "C" in iPhone 5C does not stand for "cheap" in China.
Apple's newly announced iPhone 5C, an "unapologetically plastic" model meant to broaden the company's reach with a substantially lower cost, is not so low-cost, it turns out. For those in other countries, the cost of the phone will generally range between $600 and $800, and in China, Apple's biggest target market, it will cost $730.
Apple has been hoping to crack the Chinese market, but the price may crack the deal for many — or even most — potential customers there.
"People were all expecting the 5C would be a low-cost model, but it doesn't look like it will be too competitive now," Jackson Wong, Tanrich Securities vice president for equity sales in Hong Kong, told Reuters.
In Europe, the iPhone 5C will be as much or more than China. In the United Kingdom, it's £469 ($741); in France and Germany, it's €599 ($796). Other countries will have it for slightly less, as low as $579, but nowhere is it "cheap."
In the U.S., the phone will be offered, starting Sept. 20, for $99 with a two-year wireless contract. Outside the U.S., where carriers don't subsidize the cost of phones, the cost is substantially greater.
Though you can pay more to buy phones off-contract in the U.S., neither Apple nor the U.S. carriers have announced that pricing yet for the new iPhones. IHS research says it considers the "unsubsidized cost" of the iPhone 5C in the U.S. to be $549, "the same price point as the existing mid-range model in Apple's smartphone line, the iPhone 4S," Apple's 2011 phone.
Already in China, on social media sites, some people are griping about the iPhone 5C cost, and asking others to bring them a 5C from other countries where it's cheaper to buy, the Wall Street Journal reported. Bear in mind, the average annual income in China was about $2,100 last year, according to one survey.
And a snapshot of response on Facebook, Twitter and other social media, done by measurement firm Engagor on Tuesday, found that a strong negative reaction to the phone, with comments focusing on how it is still too expensive.
So much for the "C" in iPhone 5C standing for "cheaper" or "China," unless Apple's new license with China Mobile — the world largest carrier with more than 740 million customers — yields word that the carrier will subsidize the phones there.
Mobile analyst Chetan Sharma told NBC News Wednesday that with the 5C's pricing, Apple is "saying 'no' to the low-cost segment and focused entirely on the 'premium' marketplace. And for that strategy, I think they achieved that."
"In light of this pricing, the 5C appears to be a midrange product that cannot significantly expand the available market for the iPhone line to lower-income buyers," said Francis Sideco, director for consumer electronics and communications technologies at IHS, in a statement. "As a result, the arrival of the 5c will not spur a major increase in iPhone sales in the second half of 2013 compared to previous expectations."
Sideco said that if Apple "had hit a $350 to $400 unsubsidized price range for the iPhone 5c, as some had speculated, the company might have had a chance to expand its smartphone shipments beyond what we originally expected in the second half." But in the U.S., even at the subsidized $99 price "the 5c will not spur sales because it does not materially expand Apple’s addressable market past the level we had already taken into account."
The real unanswered question is, why would Apple price its "cheap" phone so high? We have asked Apple, and will update the story when the company provides an answer.
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First published September 11 2013, 1:56 PM