As iPhone 5c grey market prices fall 30% in China, Apple cuts its production in half

When Apple announced the official price for iPhone 5c- $549 off-contract- it was a huge disappointment. It simply didn’t fit with the narrative that has developed over the summer, that Apple is working on the cheap(ish) iPhone for China and other emerging/off-contract markets to boost its market share and unit sales volumes. There was no way $549 phone will be able to do that.

Still, there was this sense of lingering doubt. What if Apple is on to something with iPhone 5c? What if Tim Cook knows something we don’t? It’s Apple we are talking about here! In less than a day Apple fan blogs were full of the reasons of why iPhone 5c is a great idea.

It wasn’t.

At least for China, where iPhone 5c now looks as dumb an idea as it did at first glance. There are no official numbers just yet, and I doubt that Apple will break down 5s/5c sales when they report Q3 results in a couple of weeks, but the data trickling in from Chinese grey market is not good.

The official price of iPhone 5c in China is 4 448 Yuan ($726). But there is a thriving grey market over there, with iPhones bought in the U.S, Europe and Hong-Kong, illegally smuggled into the country. With real people taking real risks with their real money, this market is very sensitive to the real demand for any gadget, and very quick to adjust prices accordingly.

Care to guess the current price of unofficial iPhone 5c in China? 3000 to 3300 Yuan ($489-539), according to checks done multiple by local tech sites,  and a quick review of offers on China’s main online marketplace – Taobao. That’s a drop of 30% below the official price. And, according to some sources, you can now sometimes find iPhone 5c as cheaply as 2600 Yuan.

iPhone 5c 3000 Yuan Taobao

Compare that to a very successful iPhone 5s. Its official price in China is 5288 Yuan ($863). But its most popular gold version is out of stock, and impossible to get officially. And Chinese simply went crazy over the golden iPhone during the first weeks of availability, with reseller prices climbing as high as 10 000 Yuan ($1633) in the first days of October. They now have settled down to a more sane level, but gold iPhone 5s still goes for 6 to 7000 Yuan in the grey market.

And one more tidbit of bad, if unconfirmed, news for the cheaper iPhone. Chinese site C-Technolgy, who accurately leaked a lot of iPhone related stuff prior to its launch this year, now reports that Apple has cut in half the production orders for iPhone 5c- from 300K units per day, to 150K.

Update: That Taobao thing. It might not be as bad as it seems. Turns out, iPhone 5S (wrong color) goes for 4000 to 5000 RMB ($650-820) over there, on Taobao, too. There’s that 17%+ Chinese VAT thing, that grey market avoids. But that doesn’t change the fact that average 5C is way lower than even the cheapest U.S. price, while 5S is holding, at least.

Author: Stasys Bielinis

While I like to play with the latest gadgets, I am even more interested in broad technology trends. With mobile now taking over the world - following the latest technology news, looking for insights, sharing and discussing them with passionate audience - it's hard to imagine a better place for me to be. You can find me on Twitter as @UVStaska'

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  • Isitjustme

    I can’t help but noticed the glee you felt when writing this piece of trash.

    I have never heard of this reliable news leaker you mentioned perhaps they were so much more than accurate that no one bother.


  • 1100101

    Yes, this “leaker” has never been heard from before.

    You also didn’t address the idea that China Mobile is about to go online with Apple products, and the 5c is not targeted at cutting edge adopters, but rather at people who might find it useful to wait until the can “officially” buy the phone at a “regular price”.

    Of course you also assumed that the 5c is targeting China, though I have not heard Apple say that. Only Apple “experts” such as this author.

  • Staska

    Regarding the leaker. He’s recent, but leaked quite a few iPhone photos before launch. Here’s one of them, after quick search, with iPhone 5S photo from assembly line:

    Exactly the access he’d need to make today’s claims.

    And what’s China Mobile launch has to do with iPhone 5S/5C split. Do you expect it to be materially different from the rest of the China? Why? I know perfectly well the potential impact of China Mobile should have on iPhone sales. I was probably the first English blogger to report this:

    and this (btw, includes another Ctech leak):

    I never tried to argue that iPhone is not a big hit in China or elsewhere. iPhone 5S certainly is. But the trends in Chinese grey market to me are a great indicator that things are pretty bad for iPhone 5C, at least in China. And, IMO, not much different everywhere else.

    Of course, we wouldn’t know 100% one way or the other at least until late January, when Apple reports Q4 results. IF it provides the split then, which I doubt. Most likely they won’t, and we will have to rely on third party estimates of 5s/5c sales split. And will probably argue the merits of those ad nauseam.

  • Chaka10

    “I know perfectly well the potential impact of China Mobile should have on iPhone sales. I was probably the first English blogger to report this:…”

    FWIW, I also put up a long analysis (also on 9/12/13) regarding the iPhone in Chinaand the impact of adding China Mobile(see comments to Asymco S is for Service).

    An excerpt, for example: “… just assuming that China Mobile’s users react the same way to Apples existing offerings (without any discounts or cheap phones). That would result in Apple’s share of total China smartphone sales (even including any 2G “smartphones) reaching 19%, more than double it’s current share.”

    I refer you to the full post if you haven’t seen it. I give calculations to back up my estimates and I also attached two screen shots (translated) of China’s for two unannounced iPhone models — announcing network access licenses for China Mobile’s network for an iPhone model A1516 (a version of 5c that works on TD-LTE and CHL’s 3G TD-SCDMA) and an A1518 (a version of 5s that works on TD-LTE and TD-SCDMA). Neither show up (yet) on the 5s and 5c model listings on Apple’s website. The models on Apple website show they work only on TD-LTE (China Mobile’s 4G, but not 3G TD-SCDMA).

  • Staska

    I’m sorry. But the only reference/link I got in your comment was to Tenaa homepage. Not sure if Disqus is doing it or what. If Disqus is removing links – that’s wrong. Would like a heads up

    And, well, analysis op-eds – is one (quite often better) thing. But I never claimed I was the first to see China Mobile potential. Only to report it with an interesting number from somewhat trusted source

  • Chaka10

    Wasn’t trying to be argumentative. Link as follows (look in the comment section). Worth checking out the screen shots I attached to that post.