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Wednesday, August 21, 2013

How Much Chinese Consumers Are Willing To Pay For A Cheap iPhone

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Wednesday, Aug 21, 2013

How Much Chinese Consumers Are Willing To Pay For A Cheap iPhone

Apple is releasing a lower-cost iPhone later this year.

We know a lot about this unreleased product. For instance, it's going to have a plastic backing, it's going to come in colors, and it's going to be called the iPhone 5C (or perhaps, iPhone C).

The only thing we don't know about the iPhone 5C is its price.

A lot of people are hoping Apple sells it for dirt cheap, and goes after market share. Those people are probably going to be let down. Apple is likely to sell the iPhone 5C for $400-$500, according to various analysts.

Why? Because people will be willing to pay that much for an iPhone.

Morgan Stanley analyst Katy Huberty did a survey of Chinese consumers to get a sense of the price they think is fair for a new iPhone. She found that people were willing to pay $486 (pre-Chinese taxes) for the iPhone 5C.

Why focus on China? The Chinese market is important for Apple. It's the largest growth opportunity for new smartphone buyers for Apple.

Here's her chart showing the prices Chinese consumers believe to be fair.

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