Will the iPhone 5C Help or Hinder Apple’s China Ambitions?
Many analysts believe that Apple’s (NASDAQ:AAPL) so-called “cheap iPhone,” or iPhone 5C, may help the Cupertino-based company expand its share of emerging markets. For example, Morgan Stanley analyst Katy Huberty believes that the “iPhone 5C could increase Apple market share by 13 points in China.”
However, Apple commentator Steve Heller at The Motley Fool is not convinced that the iPhone 5C will be a hit in emerging markets like China. Heller notes that Huberty also thinks that the iPhone 5C “pricing sweet spot” is $486. Similarly, well-known Apple analyst Ming-Chi Kuo of KGI Securities expects that the iPhone 5C will sell for approximately $400 to $500.
Heller notes that Apple already has two iPhone models that fall close to that price range – the iPhone 4 and the iPhone 4S. A contract-free iPhone 4 costs $450 and a contract-free iPhone 4S costs $550. Heller wonders what would compel an iPhone buyer to switch to an iPhone 5C if there are already two comparable devices available for a similar or lower price.