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.
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.
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.