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Xiaomi's growth bites into Apple's carrier expansion

By Shen Jingting (China Daily) Updated: 2014-01-04 07:40

Lydia Bi, an analyst with research firm Canalys, said that Apple's alliance with China Mobile will boost Apple's market share in China in the first half of 2014. However, in the long term, she does not expect the China Mobile version of the iPhone to substantially change the market landscape and Apple's share in China due to its high-end positioning.

"At the beginning, technology enthusiasts will pick up the new flagship device on China Mobile's newly launched 4G network," Bi said. "But this advantage may not last into the second half of 2014, as Samsung and other local competitors will bring out a large number of TD 4G devices priced at as low as 1,000 yuan per unit."

Initial market feedback has shown that demand for the iPhone 5S at China Mobile stores appears to be lower than for other carrier phone launches, according to Zhang Jun, an analyst with Wedge Partners, an independent equity analysis firm.

Pre-orders for China Mobile's iPhone 5S, with a contract, in the first two days were about 100,000 units, compared with China Unicom's 120,000 pre-orders and China Telecom's 150,000 pre-orders earlier in the year, Zhang wrote in a recent report, which was based on surveys of various sales platforms, Apple's regional distributors and telecom operators.

Pre-orders for China Mobile's unlocked iPhone 5S in the first two days from other channels, including home appliance chains, Apple's authorized stores and e-commerce websites, reached about 150,000 units, compared with 400,000 to 500,000 units for pre-orders for China Unicom and China Telecom when their iPhone 5S was launched in China in September, Zhang said.

"China Mobile may regard the iPhone 5S as an interim 4G product and is not likely to promote the model aggressively in the Chinese market," said Sun Kai, a senior analyst with German-based research firm GfK Group.

According to Apple's China website, the unsubsidized retail price of a 16-gigabyte iPhone 5S is 5,288 yuan, while an iPhone 5C with the same storage capacity costs 4,488 yuan. Those prices are some of the highest around the world and exceed the average monthly salary in China.

"As most of the iPhone enthusiasts, the majority of whom live in big cities, have already picked up their iPhones before China Mobile's official launch, the high prices will limit new additions to the iPhone's user base in China," Bi at Canalys said.

 

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