Price Of New iPhone May Be Too Expensive For China Market

In a sign of China's growing importance as a market for Apple, the company will be rolling out its new iPhones simultaneously in the U.S. and China for the first time later this month. There are a few signs, however, that the new models will not find the sort of frenzied demand as before.

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Apple usually introduces new models of the iPhone to the United States long before they come out in China. But China is a bigger market, and this month their new releases will hit both countries simultaneously.

NPR's Anthony Kuhn reports from Beijing that high prices and ample supply mean the new models will probably not generate the kind of frenzied Chinese demand that has occurred in the past.

ANTHONY KUHN, BYLINE: Brother Number Four is one depressed yellow cow. Yellow cow is Chinese slang for a scalper. Brother Number Four is his nickname. He's standing outside an official Apple store, where the new iPhone 5s will sell for the equivalent of $863 and the 5c for $733 without a contract.

He expects business to be slow.

BROTHER NUMBER FOUR: (Through Translator) It's not a wise move by Apple. At first, they said the 5c would be aimed at the China market, and be cheaper - between $300 to $500. But they didn't do it, so they won't sell well.

KUHN: Before, iPhones were in short supply, so Brother Number Four could smuggle them in from Hong Kong and sell them with a hefty markup. This time, he says, he'll be selling them for less than what they cost at the Apple Store. He'll make a modest profit, just because import duties in mainland China are higher than in Hong Kong. He reckons that before long though, he'll be selling Samsung products instead of Apple ones.

FOUR: (Through Translator) When the market is saturated, then it's over for us. Many of us are getting out of this market. Every year, Samsung rolls out new products with different functions. Each model is better than the one before it. But each new iPhone is worse than the last.

KUHN: Apple has only eight official stores in China. But unofficial stores are now everywhere, and that leaves few fertile pastures for the yellow cows.

Anthony Kuhn, NPR News, Beijing.

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