Chinese Consumers Cite Pricing as Concern for Apple's iPhone

China, the world’s largest mobile market, remains an untapped market for the new Apple (AAPL) 3G iPhone. On June 9, Apple announced a 3G iPhone retailing for $199 at its worldwide developers conference, half the price of its $499 original iPhone model.

China could be a significant market for Apple with its 565 million mobile phone users and trend-conscious consumers. The iPhone has not been officially released in mainland China, but can be found on store shelves through gray imports.

In April, we at Pearl Research released a study detailing Chinese consumer purchase intent for Apple’s iPhone. Key findings include that approximately 68% of our sample had heard of the iPhone. In our interviews, females were more likely to cite “trendiness” and “design” as a key factor in wanting to purchase an iPhone while males cited “utility” as the chief reason.

The high price tag of $500 or more was the most mentioned reason for disinterest in purchasing an iPhone along with Apple’s inexperience in mobile phones. The iPhone’s high profile has spawned Chinese copycats that duplicate iPhone’s features at a fraction of the price, retailing for $200 to $300.

With the announcement of a lower-priced iPhone at $199, Pearl Research believes one of the barriers to consumer uptake in China, the original high price, is minimized. For more information about the study, please contact Pearl Research.

In an interview with CNBC, Apple hinted that the phone might be available officially in China later this year.
 

Comments

[kbear2:]

Um, $199 is not 'half' the price of $499.

2008 Jun 11 04:19 AM

[NOWHEREMAN:]

Doesn't matter, the "gray" market was replicating it at half, on average. Underselling $200 or selling the higher capacity versions for $200 won't be a problem either.

2008 Jun 11 04:25 AM

[awcabot:]

Pearl is trying to sell it's research - such promotional posting, or advertising, should not be allowed on SeekingAlpha.com

2008 Jun 11 04:27 AM

[awcabot:]

Pearl is trying to sell it's research - such promotional posting, or advertising, should not be allowed on SeekingAlpha.com

2008 Jun 11 04:27 AM

[digivision:]

yeah also $200- $300 is not a fraction of $499
you can get an iphone copy for $200 but besides the obvious differences ,
you take a big chance of blowing off your ear , there have been many accidents of chinese cell phones blowing up, mostly due to battery and poor design

2008 Jun 11 07:50 AM

[digivision:]

If Apple can manage to sell the iPhone in China for the same $199
selling 40-45 million units will be too easy

2008 Jun 11 07:52 AM

[Aquarious:]

How deep has RIM, Nokia, HTC or any other smartphone penetrated into China?
Your research is really lacking. I'm not buying it.

2008 Jun 11 10:20 AM

[KenC:]

Yes, every customer would prefer less expensive phones. Duh!

Now, as for the China market, I saw a report back when there was a large telecoms conference on Hainan Island, in March, that said 25% of chinese cellphone owners spend $500 on their handsets, unsubsidized. That's more than enough to keep Apple happy, without having to drop prices any further.

2008 Jun 11 03:05 PM

[Dan Harris:]

What has surprised me about the people I deal with in China (mostly Chinese lawyers, mostly very wealthy) is how few of them care at all about getting email on their phones. Their feeling is that they have no need for emails outside of office hours and if there is some emergency email, their young associates can handle it. In other words, none of these people (all driving 50,000+ cars) really gave two hoots about my new Blackberry. Is this view of portable email prevalant outside the legal profession in China?

2008 Jun 13 02:06 AM