| I am a Hong Kong native and lived in Beijing, and traveled for work in Shenzhen and Shanghai extensively. I agree that the population that can afford an iphone in China is still a small portion. However, I believe a cheaper iPhone with TD-SCDMA may not be a viable solution for Apple to the Chinese market for two reasons. a) The amount of craze and worship to Apple products in key cities surpasses any reasonable level. People are willing to pay, a mark up of 58% - 98% markup in the grey market in Shenzhen. In fact, there are businesses in Hong Kong that built around hiring cheap labor to line up in Apple Store and carrying the iPhones across the border for a quick turnaround of arbitraging prices. [1] It took little more than five hours for the first Apple iPhone 5s to go on sale in China after being smuggled across the border from Hong Kong, but supplies were short and prices high. For anyone able to secure one, the new phone cost HK$5,588 ($720), or the equivalent of around 4,545 yuan, at the Hong Kong Apple store, while they were selling for between 7,500 yuan [$1140] and 9,000 yuan [$1427] in the litter-strewn building in Shenzhen where fake and smuggled phones are often hawked. [2] b) It is always been Apple's strategy to price high and capture a customer segment with high willingness to pay. The app store revenue has significantly higher share of revenue for fewer app downloads versus android. "..the App Store leads with a revenue share of 71% (compared to 29% for Android) even though total downloads through Google Play accounts for 35% of the total, versus 28% for iOS. * [3] [1] http://www.patentlyapple.com/patently-apple/2012/09/smuggled... [2] http://www.huffingtonpost.com/2012/09/21/iphone-5-in-china_n... [3] http://www.imore.com/ios-app-store-generates-double-google-p... |