Apple’s rumored low-cost iPhone 5C could help the company penetrate the Chinese market deeper according to a new report published by Morgan Stanley.
Asia has become an important part of Apple’s strategy for growth. Particularly, China plays a very important role for the company’s growth in the smartphone and tablet industry. The company has been making efforts to capture the Chinese market in a number of ways in the past. We’ve seen the introduction of China specific services in iOS like the local search engine, social networks and email services.
With iPhone 5C Apple could be looking at capturing significant market share in the Asian market. Apple’s revenue from China has been around 15% each quarter however, the growth has slowed down recently as the most recent quarter saw 14% decline in revenue year-over-year.
Katy Huberty who led an analyst team at Morgan Stanley released a report that views iPhone 5C as the key to push the revenue up again. The report draws its results by surveying 2,000 consumers in “Tier 1-2″ cities in China. The introduction of low-cost iPhone 5C could boost market share to a 13-point gain in China. Further, the report took into account if Apple struck a deal with China Mobile then the growth could add another six points.
We asked respondents that are very likely to purchase smartphones in the next 12 months but did not choose the iPhone whether they would purchase a redesigned and lower-priced iPhone 5C, one of the “Mini” products from international brands, or a comparable smartphone from one of China’s domestic brands. The survey indicates Apple could gain 13 points of unit share with iPhone 5C. About half of that share gain would come from Samsung, while most other vendors lose some share.
The report estimates that the price point for the Chinese market that would make consumers happy would be $486. Morgan Stanley’s survey also points to the fact that Apple could be looking at differentiating devices based on capability to run faster networks. So, a low-cost device could be capable of 3G while the next-gen iPhone 5S would continue to run 4G / LTE.