Apple Inc. (NASDAQ:AAPL) debuted two new iPhones yesterday, including the colorful new iPhone 5C. While no one was expecting Apple to launch a cheap iPhone, the device doesn’t even come close to being inexpensive enough for emerging unsubsidized markets like China.
The devil’s in the details
With the 5C grabbing much of its tech from the iPhone 5, let’s talk about what is new about the device:
- A plastic casing available in green, white, blue, pink, or yellow
- Upgraded front-facing iSight camera for FaceTime HD
- More LTE bands than any other smartphone
- A slightly bigger battery than the iPhone 5, which increases LTE Internet browsing by 2 hours and add 25 more hours of standby time
Apple Inc. (NASDAQ:AAPL) ditched the iPhone 5 and is replacing it with the 5C, selling the 16GB version for $99 with a two-year contract. That makes it Apple’s first new phone being sold for just $99. Other than that, the 5C uses the same A6 chip, Retina display, and other specs as the iPhone 5.
All right, so Apple Inc. (NASDAQ:AAPL) has a slightly better and more colorful smartphone on the market. Now what?
Not much of a game changer
The Wall Street Journal reported today that Apple Inc. (NASDAQ:AAPL) just received a network license to sell its iPhone on China Mobile Ltd. (ADR) (NYSE:CHL). If it proves true, this would give Apple access to China Mobile’s 700 million mobile users, but there’s just one problem: China largely sells smartphones without subsidies, which means Apple’s new device will come in at a staggering $733 in that country. Compare that with rival Samsung selling Android phones in China for around $100 unsubsidized. Lots of colors and even the new iOS 7 don’t make up that almost $600 price gap.
That doesn’t mean a deal with China Mobile Ltd. (ADR) (NYSE:CHL) would be insignificant, but without an inexpensive new iPhone, Apple Inc. (NASDAQ:AAPL) misses out on any low-end smartphone unit sales.