Apple Charging 33% More In China For “Cheap” iPhone 5C

The supposedly "cheap" 5C will be sold for around $733 in mainland China, 33% more than the price in the U.S. and 21% more than what's being charged in Hong Kong.

The supposedly “cheap” 5C will be sold for around $733 in mainland China, 33% more than the price in the U.S. and 21% more than what’s being charged in Hong Kong.

While some Apple enthusiasts might have been put off by the colorful plastic shells of the new iPhone 5C, it’s hard to complain about the $99 price point. Even the full, unsubsidized price of $549 is lower than what you’d pay for many new, comparable smartphones. But customers in mainland China are scratching their heads and wondering why they are being charged $733 for what is supposed to be a bargain phone.

It looked like Apple was set to make a splash in China when the government there announced today that iPhones are approved to run on China Mobile’s next-generation network. This would open up the device to the largest wireless carrier in the world.

But then came the news that Chinese customers, who generally pay the full sticker price for phones, would be paying about 33% more than their American counterparts.

Likewise, the higher-end iPhone 5S, which starts at $649 for a no-contract version in the U.S., will go for around $864 in China, also a 33% price increase. Apple products, even those manufactured in China, are subject to a 17% tax, but that would only account for some of the difference.

Analysts had expected the 5C to go on sale in China, where Apple has had trouble luring consumers away from lower-cost options, at around $400.

“By any standards, it’s a premium price,” one analyst tells the NY Times about the $733 price to customers in China. “When you really look at it, they didn’t make a cheaper phone. They made a more expensive phone so that they could call the other one a cheaper phone.”

Others say that Apple’s high retail price may be inflated so that wireless carriers can later promote the device with discounts.

“It looks like they are trying to test the market,” said yet another analyst. “How much are Chinese consumers willing to pay for the phone?”

Given that customers in Hong Kong are only expected to pay around $604 for the iPhone 5C (only about 10% higher than the U.S. cost), you can expect that there will be a lot of suitcases full of the less-expensive carried to mainland China.

Apple’s success in China could have a significant impact on consumers here. On the one hand, an increased customer base for the iPhone should keep down the costs of manufacturing. On the other, it could also result in shortages of devices as the new audience clamors to get their hands on the phone.

We can’t imagine that the company would be able to produce enough phones at one time to meet the demands of a truly global customer base. Apple already staggers the release of new devices to various countries. If the iPhone becomes a hit in China, there will likely be even more staggering as the company gives priority to certain countries.