The market did not respond well to Apple’s (NASDAQ:AAPL) unveiling of its much-anticipated low-cost iPhone, called the iPhone 5C, last week. The device had been expected to cost between $300 and $400, but the phone will cost $549 without a contract, which left Apple investors and enthusiasts confused over the company’s strategy with the not-so-cheap device.
The iPhone 5C, along with Apple’s deals with large Asian carriers China’s China Mobile (NYSE:CHL) and Japan’s NTT DoCoMo (NYSE:DCM), were expected to help Apple regain marketshare in Asia that had been lost to rivals like Samsung (SSNFL.PK) and others offering cheap phones that run on Google’s (NASDAQ:GOOG) Android platform. However, new details coming from various sources are saying that Chinese carriers like China Unicom (NYSE:CHU) and China Telecom (NYSE:CHA) have offered discounts on the smartphones and are selling out on preorders of the devices.
According to a report from Fortune’s Apple 2.0 blog, which had access to the rate cards from the carriers, the iPhones are getting even more aggressive discounts in China than in the U.S. 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.
“Carriers across the U.S. (and internationally) are already offering a wide range of price and plan choices for 5c/5s,” ISI’s Marshall told his clients, according to the Fortune report. “We believe the actual choices consumers have for iPhone adoption (e.g., both upfront and monthly costs) are much more varied than can be captured by a single, unlocked ‘sticker’ price.”
The discounts seem to be doing their job, as according to a report from CNET, the pre-sale for iPhone 5S devices went live today, and most models have already sold out in China. The “space gray” color of the iPhone 5S is apparently the only option left in Beijing and Hong Kong.
The iPhone 5S and 5C will become available in the U.S., China, and other countries on Friday.
Here’s how Apple traded on Tuesday:
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