iPhone 7 pricetags may hinder China sales

Despite Apple's crystal clear endeavor to amplify its presence in China, the higher Chinese pricetags on the new iPhone 7 may further drag down sales, as Chinese smartphone brands are offering equally powerful gadgets at much lower prices.
Written by Cyrus Lee, Contributor

Apple is not giving up on China even though iPhone sales in the world's most populous economy have lost steam over the past year: China remains in the first batch of countries to release two iPhone 7 flagships, and has been added to the "iPhone Upgrade Program" along with the US and UK, which aims to encourage consumers to change for a new iPhone handset every year.

But Apple is also lifting its retail prices in China, mainly due to the depreciation of the Chinese currency over the past year, in a bid to protect its profits denominated in the US dollar. According to the Apple's official website for China, retail prices of all sorts of iPhone 7 and iPhone 7 Plus models have added 300 yuan ($45) in comparison with equivalent iPhone 6S models.

Taking the most popular models iPhone 6S and 6S Plus 64G for instance, the two handsets were priced 6,088 yuan ($914) and 6,888 yuan ($1,034) in China in 2015, but the equivalent pricetags for iPhone 7 and 7 Plus 128G are 6,388 yuan ($959) and 7,188 yuan ($1,079) this time. The roughly 5 percent increase in retail prices is basically in line with the loss of Chinese currency to the US dollar in exchange rate from a year ago.

Apple has faced complaints for its outrageous retail prices in China for years, and the company has pushed them even further since launching the larger-screen smartphone iPhone 6 Plus. In comparison, one of its major competitors Samsung has been lowering its prices globally to combat Apple. Samsung's latest Note 7 flagship, equipped with 4G RAM and 64G storage, is sold only 5,998 yuan ($900) in China with a pile of free accessories, leaving a notable price spread.

But Apple's real rivalry in China is no longer Samsung: it's local brands such as Huawei, Oppo, and Xiaomi that surpass Apple in terms of shipment to China. With iPhone 7 and 7 Plus retail prices more than double that of these Chinese brands' high-end flagship models, which are always marketed as being equipped with most advanced technologies, Apple's plan to change its lacklustre sales in China with the iPhone 7 models is not easy to achieve.

Some reports in China have criticized Apple's new flagship smartphones for its "outdated hardware upgrades", advising that consumers may wait another year as Apple is likely to bring about revolutionary changes on its 10-year-anniversary model.

Foreign media are also speaking in similar tones. Bloomberg said the new iPhone is not likely to become another smash hit in China as it "offers little that resonates with Chinese consumers: no affordable models such as the SE or 5C, a radical redesign, new colors -- anything that lets people know at a glance that it's the latest and greatest".

Wall Street Journal said some Chinese consumers consider Apple to now be copying Chinese smartphones -- features such as dual cameras and handsets without headphone jacks were all firstly seen on Chinese smartphones.

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