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User 7399101

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  • Why Apple's 5c Phone Pricing Makes Perfect Sense [View article]
    The price premium is due to a value-added tax (17%) and import duties that go to the Chinese government.
    Sep 12 11:04 PM | Likes Like |Link to Comment
  • China To Apple: Give Us Something Special [View article]
    I don't understand about all the disappointments over the new iphone prices, especially when referring to China. If Apple offers a cheap phone to reach the mass market, it will lose it's core customers - the affluent - because it will lose its premium brand image. Just like Coach bags, they become so ubiquitous that the wealthies in Shanghai and Beijing start to turn back at them. The Coach brand is deteriorating. And those who would buy cheap iphone are usually not brand conscious, they would easily switch to other brands if they are cheaper. Apple needs to keep a balance between reaching a broader market and maintain a premium aspiring desirable brand. For most middle classes families in large and middle size cities, 4000 yuan is affordable there. Also, people are mostly willingly to pay for their kids who may well be the main demographics of 5C users. The premium price of 5C in China is caused by heavy value added tax (17%) and other tariffs. They go to the Chinese government. If Apple sells 5C at $550 in China as it is in the US, it would mean Apple gets the revenue of only $385. Now that's a margin killer. Apple will never be able to compete with the Chinese local companies in the low-end market which is basically protected by the tax scheme. BTW, Apple has a low end phone, it's called Apple 4 which is competitvely priced in China.
    Sep 12 08:30 PM | Likes Like |Link to Comment
  • Pricing Of New iPhone Will Determine Success Of Apple In China [View article]
    I think the pricing strategy for 5C is geared more towards the Chinese market than the US or other markets. $550 is equivalent to 3,300 Chinese yuan. In China, 4S is selling for 3,300 yuan and iphone 5 for about 5,000 yuan (similar to Samsung galaxy 4), the highest end Xiaomi phone (aka China's apple) for 2,000 yuan. Taking these into consideration, the price for 5C unlocked is really not outrageous. Pricing it lower runs the risk to be grouped with low-end market which is very crowded there. Apple needs to keep a balance between reaching to more customers and maintaining its premium brand image, especially in brand-conscious Chinese market where owning a premium brand is a symbol of status. There is definitely a broadened market there with 5C. Many people in 2nd and 3rd tier cities would be able to afford it.
    Sep 10 06:37 PM | 1 Like Like |Link to Comment
  • Tim Cook responds to criticism of Apple's (AAPL -1.6%) Chinese repair/warranty policy by state-owned media outlets and a government agency by issuing an apology letter that outlines repair policy changes for the iPhone 4 and 4S. Separately, Fidelity Contrafund, Apple's biggest active shareholder, discloses it cut its stake in the company by 10% in January and February, to 10.4M shares. [View news story]
    Totally agree. I know the Chinese culture in and out. TC did the right thing. It's all about 'saving face' for the Chinese government. Now expect the whole thing to die down...
    Apr 1 05:00 PM | 1 Like Like |Link to Comment