Apple iPhone 5C and 5S launch gives China hang up over high price

Chinese analysts and consumers at Apple press event in Beijing say plastic 5C model is not low-end as publicity had suggested

Jonathan Kaiman in Beijing

An Apple employee is surrounded by reporters in Beijing. One user compared iPhone 5C to a potato peeler, others saying the C stood for costly, not cheap. Photograph: REX/Imaginechina


China's Apple fans tend to meet the company's product releases with the same anticipation and reverence as their western counterparts. Yet in Cupertino, the California-based company's unveiling of two new iPhone models on Tuesday night left some of them scratching their heads.

On Wednesday morning Apple showed taped footage of its Silicon Valley product release to about 80 reporters at a swish Beijing hotel. It was the company's first-ever media event in China, leading many analysts to believe that one of the new models would be specifically aimed at capturing the Chinese smartphone market, currently the largest in the world.

Many China tech analysts predicted that one of the new models – theiPhone 5C, a slightly less expensive, plastic-backed version of theiPhone 5 – would cost 3,000 yuan (£310), giving it an edge over low-cost competitors. Yet on Wednesday, the company announced that a 5C with 16GB of memory would cost 4,488 yuan (£465), roughly the same cost as the iPhone 5. The other model, the iPhone 5S – which features faster hardware and a fingerprint reader beneath the home button – will sell for 5,288 yuan (£547).

Nicole Zhou, a 30-year-old employee at a state-owned enterprise, bought herself a Samsung S4 phone on Wednesday afternoon, hours after the announcement. "I didn't know the price was going to be 5,000 yuan," she said. "I don't see any really big difference between this and the other new iPhone."

Users of China's most popular microblogging service Sina Weibo chimed in as well. "The C stands for costly," was one common refrain. The "S" in 5S, some users surmised, may stand for "superfluous" or "super-expensive".

Other users compared the 5C's colourful plastic shell to a potato peeler. "Every family in Britain could use an iPhone 5C … because you need something in the kitchen to take care of all those potatoes," wrote a user calling themselves A-Chuan Wants to Rest.

Apple stores in China will begin selling the handsets on 20 September, the same day as they hit shelves in the US.

"Even though Apple has a lower-end iPhone now, its price is still considered mid-end in China and not low-end," Sandy Shen, a Shanghai-based analyst for Gartner, told Reuters. "Considering Apple's old rival Samsung and domestic players such as Huawei, Lenovo and Coolpad all have phones in that category, Apple will still lose out in market share in these key segments."

China is Apple's biggest market outside of the US and Europe, but its market share has declined precipitously over the past year, as international competitors such as Samsung and local brands such as Huawei and Xiaomi introduce comparable phones at lower costs. Apple is currently ranked seventh in the country in terms of sales.

While Apple has lost much of its market share, it has not lost its prestige. "It's like, all of my colleagues were watching the media release really closely," said Chen Xin, 23, a human resources employee at a five-star hotel in Beijing. "For them, the price means nothing compared with the prestige of the brand. Everybody thinks that Apple products are really cool."

Chen used an iPhone 4S until last year, when she bought a Samsung phone. She doesn't plan on switching back to Apple. "It's just too expensive," she said.