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Analysts appear split on whether Apple will flounder in China with its new iPhone X.
One school of thought expects consumers in China to be turned off by the iPhone X’s hefty price tag of RMB8,388. That’s a figure roughly equal to $1,260 (using a currency conversion rate from September 28), making the device significantly more expensive in China than in the US, where the device will be sold at a starting price of $1,000.
That potential sticker shock comes as cheaper but still high-end smartphones are being churned out by China-based manufacturers like Huawei, which has seen sharply increased levels of adoption lately. According to figures from Counterpoint Technology Market Research, Apple trailed four China smartphone brands in shipment share for Q2 2017: Huawei, Oppo, Vivo and Xiaomi.
Others say it’s a mistake to think Apple will fail, given its history of proving detractors wrong time and again. For them, Apple’s marketing prowess has created a luxury brand that smartphone users will still adopt in droves, no matter how expensive iPhones get.
In fact, there are signs that Apple’s pricing strategy with the iPhone X is not enough to deter its strongest fans from buying the device.
According to a September 2017 survey of internet users in China from Penguin Intelligence, 66.2% of those who planned to buy a new iPhone had their sights set on an iPhone X. That compared with just 20.4% who planned to buy an iPhone 8 Plus, and 13.4% who expected to pick up an iPhone 8. In other words, among those with an intent to buy an iPhone, the cheapest device from Apple’s new lineup—the iPhone 8—was the least enticing.
Penguin Intelligence’s poll also found that nearly two-thirds of Android users in China named price as a major advantage that devices running Google’s operating system (OS) had over the iPhone. By comparison, iPhone users didn’t consider price as one of the main benefits of using the Apple devices. Instead, they found value in things like the iOS, as well as the iPhone’s overall functionality, security and design.
The data seems to suggest that those in China set on buying an iPhone won’t be dissuaded by Apple’s higher pricing strategy, while price factors strongly into considerations made by those who purchase Android devices.
And while there have been signs of a tepid response to the release of the iPhone 8 in China, it’s still unclear if the iPhone X will garner a similarly lukewarm reception. That device won’t arrive in Apple Stores in China until Nov. 3.
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