After losing exclusive access to Apple's iPhone, China Unicom now focusing on low-cost handsets
China Unicom has turned its focus to low-cost smartphones in an effort to win over new customers now that the carrier is no longer China's exclusive iPhone provider, and the strategy appears to be working.
Apple is rumored to launch a new plastic iPhone this year.
The new approach for China Unicom, representative of the vast demand for low-cost smartphones in China, was detailed on Thursday by the Associated Press. The plan is apparently paying off, as China Unicom Ltd. has reported that its profits for the first half of fiscal 2013 grew by 55 percent.
China Unicom was the sole provider of the iPhone until March of 2012, when competing carrier China Telecom began offering Apple's smartphones in mainland China.
Demand for low-cost smartphones in emerging markets, particularly China, has helped to drive speculation that Apple could introduce a new iPhone model this year to address that market segment. Numerous leaks have shown off a plastic iPhone case in multiple colors, sporting the same 4-inch display as the iPhone 5.
While the plastic iPhone is expected to be Apple's new entry-level smartphone, the device won't negatively affect the company's margins, according to Ming-Chi Kuo of KGI Securities. He expects that Apple will price the new iPhone between $450 and $550, giving the company "decent profitability, but at the cost of volume."
The big prize for Apple in China remains China Mobile, the world's largest wireless provider with 715 million subscribers. For years it's been rumored that Apple was working on a deal with China Mobile, but to date the iPhone is still not officially available through the carrier.
Apple Chief Executive Tim Cook met with the CEO of China Mobile on a recent trip to the country. Cook has met with China Mobile a number of times, furthering speculation of a deal between the two parties that has yet to become a reality.
30 Comments
With every story and report, the upcoming plastic phone is looking like it WON'T be low cost. More like a midrange phone that'll be the same price as the iPhone 4. I guess €400 isn't so bad for a new iPhone. It's just hard to imagine paying $450 for a plastic iPhone, but at least it'll have the same specs as the iPhone 5. That means it should be better than pretty much every other smart phone available for the price.
A deal with China Mobile is a devil's bargain, because undoubtedly the government will demand some kind of technology transfer and/or the keys to a China-based App Store to take a bigger cut of profits and to enable more government control over what is sold to customers.
Those prices have to be wrong. Why would anyone buy last year's internals in a plastic housing if it's only 50-100 bucks cheaper than the flagship model?
iPhone cheapo really has to start in the $350 bracket to make any kind of value-sense to the consumer.
@spamsandwich I agree. The problem is all those stupid analysts who insist Apple compete in the low-end market will continue to force AAPL down until they do. I continue to challenge the idea these low-cost phones are actually smartphones and not just enhanced versions of the old simple phones everyone started with. It's the same thing Microsoft did with PCs. Flood the market with pieces of garbage so they can say they've won. Android phones are doing this and the world isn't better off only the vendors of the phones.
Those prices have to be wrong. Why would anyone buy last year's internals in a plastic housing if it's only 50-100 bucks cheaper than the flagship model?
iPhone cheapo really has to start in the $350 bracket to make any kind of value-sense to the consumer.
Unlocked iPhone 5 starts at $650. It would be nice if they got it down to at least $400, but at $450, it would still be $200 less.