Bloomberg News

Apple's New iPhone Color Could Strike Gold in China

September 18, 2013

iPhone 5S

The new Apple Inc. iPhone 5S sit on display during a product announcement in Cupertino, California. Photographer: David Paul Morris/Bloomberg

The iPhone 5c is supposed to be Apple's breakout product in China. It's more affordable than the high-end model and comes in five pastel colors.

But Apple may only need one color to capture Chinese status-seekers with money to spend, and just the top-of-the-line iPhone 5s has it: gold. While that may seem gaudy to some Western consumers, it could be a huge hit in China.

"Gold-colored gadgets are popular among high-end consumers," James Yan, an analyst at IDC in China, wrote in an e-mail. "We are not surprised that some handset vendors have designed such products."

China's upper-class often treats gadgets like jewelry. On the streets of Shenzhen or Beijing, you can find stores selling gold-colored mobile phones from Nokia or street vendors carrying gold cases for iPods. These aren't actually made of real gold. (Though, that exists, too.)

"Chinese consumers generally have the 'buying-for-face' culture," Yan wrote. "This phenomenon is more obvious in consumer electronics."

The iPhone 5s -- also available in silver and gray colors, similar to the previous model -- is the first Apple phone to come in gold. It'll cost at least 5,288 yuan ($864). The gold 5s already looks to be a hit in China and Hong Kong, with pre-orders quickly selling out, according to state-run news website Eastday.com.

China is one of the most important regions to Apple's business, and growth is slowing. With the new phones set to come out tomorrow, Apple still hasn't announced a deal with China Mobile, the nation's largest carrier. Analysts expected the iPhone 5c to be Apple's savior in emerging markets. That was until they heard the price.

"The 5c appears to be a midrange product that cannot significantly expand the available market for the iPhone line to lower-income buyers," Francis Sideco, an analyst at IHS, wrote in an e-mailed statement. "The 5c will not spur a major increase in iPhone sales."

At between 4,488 yuan and 5,288 yuan, the iPhone 5c doesn't come close to the prices of its low-cost rivals. Xiaomi is selling its new Hongmi smartphone for less than a quarter of the price of the cheapest 5c.

So if the gold iPhone 5s pans out in China as some expect, Apple may need to mine everything it can from that product instead.


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