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iPhone 5c is too expensive for ‘growth’ markets

Last night we posted news on the prices of the new iPhone 5C and iPhone 5S. The much awaited 16gb ‘budget’ iPhone ended up costing £469 in the UK, quite a lot of cash for a plastic backed smartphone.

While UK and US punters are likely to just buy one of the new phones without being overly concerned with the pricing, the problems for Apple hit home when they try to sell in emerging markets such as China and India.

Liu Donghai, a 25 year old chemical engineer spoke to dnaindia saying “My original estimate of the 5S price was around 3,000 yuan, but more than 4,000 – I think for a budget version the price may be a little expensive. I don’t think I can buy one. If the 5S is around 5,000, then it’s similar to the already-released 5 and 4S. I would accept this.”

The iPhone 5C’s reception in China has been muted. Many punters there are complaining about the pricing. Reader Hiromi emailed us last night from China to say ‘The iPhone 5c is much too expensive, it is an iPhone with a plastic back so why are they charging so much for it?’.
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The biggest question, even for UK users, is the confusing crossover pricing between the iPhone 5C and iPhone 5S. The 32GB version of the iPhone 5C costs £549 in the UK. The more ‘expensive’ iPhone 5S model with 16GB capacity also costs £549.00. We aren’t sure Apple are aware of how the Chinese market works. This is verified by their market share in China which dropped to 5 percent in the second quarter. With the high price of their new 5c and 5s, we can’t see the situation improving for them either in the next 6 months. Research shows that half of China’s smartphone shipments are in the 700 – 1,500 yuan range.

Arch rival Samsung have a wide range of phones available in China for much less than the iPhone 5C, and they are selling well.

Kitguru says: Have Apple dropped the ball completely?

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