IDC: Apple Will Get Twice Its Size in China Next Year
Despite the high price of Apple’s (NASDAQ:AAPL) new iPhone 5C, which was supposed to be a low-cost smartphone to help the company catch up with competition in emerging markets, research firm IDC expects that Apple will sell plenty of devices in China, according to a report from the Wall Street Journal.
Entry into China is crucial for Apple, as the country has the biggest smartphone market in the world. The research firm cited Apple’s expected deal with China Mobile (NYSE:CHL) — which at 700 million subscribers is China’s largest wireless carrier — as a reason it’s expecting such large growth. Although no official announcements have been made about the potential China Mobile deal, reports have come out about posters from China Mobile advertising the new iPhones, indicating a deal could come very soon. Apple already has deals with China Unicom (NYSE:CHU) and China Telecom (NYSE:CHA), China’s second and third largest carriers respectively.
It was expected that the device would cost between $300 and $400 so consumers and Apple investors alike were disappointed when it was revealed that the iPhone 5C would cost the equivalent of $733 in China, placing it well out of reach for many. Analysts initially speculated that the high cost of the device would cost Apple it’s growth in China, but IDC said it expects Apple’s market share in the country to double within the next year on sales of both the iPhone 5C and the even more expensive iPhone 5S.
Some recent research from ABI Research showed that in the second quarter of 2013, Apple continued to lose market share in China to rivals Samsung (SSNFL.PK), Coolpad, Lenovo, and Xiaomi, all of which offer cheap devices running on Google’s (NASDAQ:GOOG) Android platform. IDC believes that sales of the new iPhones will turn Apple’s fortunes in China around completely.
Aggressive discounts from China Telecom and China Unicom have certainly helped Apple lovers in China get their hands on a smartphone that may have been out of reach priced at sticker value. China Telecom is offering plans that give away the iPhone 5S for free as long as customers agree to be locked into a long, expensive contract. China Unicom has eight different plans offering the iPhone 5C for free.
Despite the initial disappointment with the high cost of the device, Apple had a record-breaking sales weekend, selling 9 million devices after the new iPhones were launched in the U.S. and China among other markets on September 20.
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