Reports are coming in that the iPhone may be coming to the Chinese users slightly earlier than was speculated and at a price that is very much less than what customers in US pay for their iPhone.
This was revealed by an "insider" at China Unicom to Xinhua News Agency, the official mouthpiece of the Chinese Government.
China Unicom, China’s No 2. carrier with more than 140 million mobile subscribers had announced in August that they have struck a deal with Apple to bring the iPhone to China.
According to a report, China Unicom, the second largest telecom player in China with more than 140 million mobile subscribers will be launching the iPhone soon after the October 1-8 National Holiday in four different models – 3G 8GB, 3G 16GB, 3GS 16GB and 3GS 32GB. It's not clear whether these iPhone models will be with or without Wi-Fi as we had heard that China Unicom will offer two iPhone models. The first model will not have Wi-Fi support which has apparently already received approval by the Chinese Ministry of Industry and Information Technology. The second iPhone model will have both Wi-Fi and WAPI (a Chinese Wireless Standard) support.
The pricing strategy adopted in China is interesting. Unlike in the US, where Apple chose to go for a very low upfront price supplemented with high monthly fee, the upfront cost of the iPhone in China is kept moderately high while the monthly fee are among the lowest in the world. For example, the 8GB iPhone 3G will cost the equivalent of $303 in China (available for $99 in US). However, while the subscribers in US pay a minimum of over $39.99/mos for voice service and an additional $30/mos. for data, the lowest service package in China will be available for just over $18.45/mos.
Putting this in perspective, Chinese subscribers will end up paying $746 at the end of two years and the same offer in US works out to $1779 at the end of two years. However, this was something expected after the company's debacle during the launch of iPhone in India, the world's second largest telecom market, where an extremely high price meant very few takers eventually. The Chinese market is also one where Apple can play on volumes and not just on the margins.
The launch of iPhones in the world's biggest telecom market is not just a crucial test for Apple, but for China Unicom as well since this will give the carrier a competitive advantage in luring subscribers from China Mobile, which only recently crossed the 500 million subscriber mark.
Let us know your thoughts on China Unicom's pricing strategy for the iPhone.