Apple is now preparing to ship cheaper versions of its iPhone to China Mobile, according to sources of the Wall Street Journal.
The Chinese carrier is now listed among the carriers which will be receiving shipments of the new low-cost Apple product from its manufacturing partner Foxconn. However, no definite reports yet were received regarding confirmed contract-signing or any specific date of iPhone deliveries.
Currently, China ranks the third largest market for Apple products based on sales. According to Apple CEO Tim Cook, China is representing great potential growth opportunity for Apple with a great number of potential first time smartphone users. Also, this deal will allow Apple to reach a larger market through the biggest wireless provider in China. China Mobile has 700 million subscribers, a whopping size seven times compared to Verizon Wireless, the largest carrier in the U.S. This will also improve Apple's distributions to the world's largest market for smartphones.
The iPhone maker was hesitant at the onset to offer the Apple product to China Mobile because of its different and somehow undependable 3G network. Its network structure has slowed speeds that make production costs more expensive. On the other hand, China Mobile was defensive against the insistence of Apple for guarantees on iPhone sales volume. Aside from these issues, price competition also hampered the success of Apple in the country. The iPhone is perceived expensive compared to other local brands that offer the same features and specs at a lower price.
Analyst TZ Wong told WSJ that the low cost iPhone will surely change the game. Presently the cost of an iPhone is at 5000 yuan equivalent to $815, not considering subsidies. Most smartphones being offered in the market were cheaper by $200. Although there are no specific details from Apple regarding how less expensive the new low cost iPhone will be, it is expected by analysts that is will be around $400 a unit. This will fall under the midrange category for China's mobile units.
Apple and China Mobile had years of negotiations but will now close with this amazing deal.
