Apple Faces Soft iPhone 5C Demand in China
Apple’s (NASDAQ:AAPL) iPhone 5C is purposed to appeal to consumers interested in an Apple smartphone, but not willing to break the bank. It is also especially made to target those cost-concious buyers in China. However, according to an analyst note highlighted by Apple Insider, the device is not seeing the kind of demand Apple hoped for in the country, and that may continue until the Cupertino, California-based company gives in and lowers its price.
Cantor Fitzgerald Brian White explained Wednesday, “In our view, we believe there is a big market opportunity for the iPhone 5C. However, we also believe Apple could better penetrate this market by offering the iPhone 5C at a more favorable price point, and this is especially true in developing countries such as China. During our visit to Apple stores and resellers this week in China, we have found that there is healthy interest in the iPhone 5C. However, we believe this has not yet translated into exciting volume levels in China.”
White believes that the iPhone 5C’s price must come down to a range of U.S. $325-405 if it wants to earn any more significant demand in China. The country is known for its availability of low-cost devices, thus if Apple wants to sufficiently compete and make its mark, it has to follow suit despite its reluctance to do so.
Apple could even face iPhone 5 order reductions if it fails to bring down its price. However, no adjustments have yet been cited as White continued to maintain, “Our meeting with a tech supply chain company highlighted an inline ramp of components in 3Q:13 that we believe includes those used in the iPhone 5C. However, our contact indicated that the feedback around demand for the iPhone 5C has been soft.”
On the other hand, iPhone 5C demand in the U.S. has been consistent, but the 5S is the device that has succeeded in winning the majority of consumers’ attention. Though Apple has encountered supply issues with the highly anticipated phone, leading to many order delays and frustrated consumers, the company announced Wednesday that it will launch the iPhone 5S and iPhone 5C in Italy, Russia, Spain and over 25 new markets on October 25, and it will then head to ten new markets by November 1.
China is still a gold mine for Apple though, representing the world’s largest smartphone market, and that means the U.S.-based company will have to act fast to ensure its presence in the lucrative country is maintained and strengthened.
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