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China Mobile’s Demand for iPhone 5s and 5c May Not Be as Expected

According to a new report, sales of the iPhone 5s and 5c in China would not be as expected

In the first week after China’s (and the world’s) largest phone operator began selling the new Apple iPhones, sales of those devices in this country are somewhat lower than expected from Wall Street, according to a report released last Thursday.

“We recently spoke with China Mobile after the official launch of the iPhone 5s and iPhone 5c, and we believe that global demand is lower than we originally expected” , said analyst Jun Zhang of Wedge Partners .

China Mobile’s Demand for iPhone 5s and 5c May Not Be as Expected
China Mobile’s Demand for iPhone 5s and 5c May Not Be as Expected

One of the causes of this news could be that several months before, some inferior rivals to China Mobile, had already put on sale the Apple iPhone 5, so many users who bought that device, are not in the need to acquire something newer.

Price and competition could be the main reasons

The report also notes that some retailers in China have lowered the price of the iPhone 5 to compete directly with China Mobile sales.

Another cause could be that due to the great variety of smartphones that we can find in the market, consumers tend to choose the cheapest devices, which has caused that the prices of smartphones have fallen by 12.5% in the third quarter of last year .

However, Samsung announced last Friday the results obtained during the fourth quarter of the previous year and warned that during the first quarter of 2014 they are receiving less demand. In addition, he added that he is seeing strong competition with Apple devices and Lenovo devices , due to their low-cost smartphones in the case of the latter.

Let’s remember that Lenovo is a company based in China that is applying a rather aggressive strategy and is gaining ground with Samsung. This new strategy from Lenovo could be one of the smartest, because while China is the world’s largest market for smart devices, there are many locations in the country that do not yet have sophisticated enough wireless networks for users to take advantage of their Apple device.

And if we add to that the fact that the income of citizens in Asian countries is relatively low, consumers focus mainly on price when choosing their smartphone, although in many cases they might actually want another type of device but simply cannot afford it.

The report presented, also points out another aspect that could be key to find out why the sale of the new iPhone 5s and 5c is not as expected.

Wedge estimates that China Mobile could have sold about 400,000 iPhone 5s and 5c. Of these sales, 100,000 could have been free devices . In addition, the firm believes that Apple will sell 35 million iPhones in China during this year 2014.

To all this, analysts expect Cupertino’s company to announce this Monday that quarterly sales have grown by 5% , reaching 57.5 billion, with a net profit that would rise by 2%.

In addition, according to the guys at UsaToday, Apple’s sales have risen 40% since June, a growth driven, in part, by the optimism put into Apple’s deal with China Mobile .

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