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High price to greet iPhone fans in China
Apple is a master at creating buzz around its product launches. But as the popular iPhone approaches its official debut in China — the world’s largest mobile-phone market — consumers here seem anything but excited.
The buzz-killer is price. China Unicom (Hong Kong) Ltd., which will start selling the device Friday, is offering a version of the 32-gigabyte iPhone 3GS for 6,999 yuan ($1,025) without a service contract, which is the most popular way for people to purchase phones in mainland China. That compares with about the $800 consumers pay for the same product in nearby Hong Kong, which has different wireless carriers.
When wrapped together with a service plan, as is generally done in the U.S., the phone will cost Chinese subscribers at least $3,120 over two years, compared with the roughly $2,600 cost for the same period for customers in the U.S.
China has an estimated 710 million mobile-phone subscribers, according to government figures. But the average customer pays less than $15 for monthly service and only 7.5% of the handsets sold in the country last year were smart phones like the iPhone. The average smart phone in China costs about $350, estimates research firm IDC.
But China’s smart-phone market is growing quickly, as all three Chinese carriers this year have deployed new third-generation, or ‘3G,’ networks. The higher transmission speeds of 3G enable functions like wireless video that are well suited for smart phones.
The market is also becoming more competitive, with a host of new devices being released, including several that run Google’s Android software. And Nokia Corp., which sells more than a third of all cellphones in China, has been focusing on making devices more affordable, an effort Nokia executives say is designed to ‘democratize’ the smart-phone market.
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