Apple's 'budget' iPhone 5C costs over $700 in China

The iPhone 5C's high price could still be out of reach for many consumers in China

iPhone 5C photo on Apple's China website

iPhone 5C photo on Apple's China website

Apple unveiled its long-rumored "budget" iPhone on Tuesday, but it's not as cheap as some had expected.

The lower-cost iPhone is actually quite expensive, at least in China, a vital market where Apple has been struggling to grow its share.

Apple's website in China posted prices for the iPhone 5C after its launch in the U.S. Tuesday. The 16GB version will cost consumers 4488 yuan (US$728) without carrier subsidies. That's only 800 yuan less than the 16GB iPhone 5S.

In fact, the price puts the iPhone 5C in the high-end smartphone segment, far from China's low-end phones, which can go for 1000 yuan or less.

Apple didn't say ahead of the launch how much the phones would cost -- it did not confirm they were coming at all, despite the widespread rumors. But it was widely thought that the phones would be cheaper to help Apple win new business in emerging markets.

In fact the phones will go on sale in developed markets as well. In the U.S., the 5C will be priced from $99 for the 16GB version, versus $199 for the 5S.

The phones will go on sale Sept. 20 in both China and the U.S. -- the first time Apple has brought its smartphones to China on the same day as the U.S.

Apple's phones remain some of the most popular tech gadgets in China, now the world's largest market for smartphones. But despite Apple's success, it's been missing out on a vast swath of potential Chinese customers, who are buying more affordable Android handsets.

In this year's second quarter, Apple fell to seventh-largest smartphone vendor in the country, according to research firm Canalys. During that period, its market share was overtaken by domestic company Xiaomi, which sells high-end phones at low prices.

Last week, Xiaomi unveiled its own new handset, the Mi3, which has a 5-inch HD screen, quad-core processor and 13-megapixel camera. The 16GB version will start at 1999 yuan, less than half of the iPhone 5C's price.

Other companies including Samsung, Lenovo and Huawei are also out-selling Apple in the country, with low and midtier handsets, according to Canalys. Analysts had said Apple should price its budget iPhone at 2000 yuan or lower to make it competitive.

But in designing the iPhone 5C, Apple decided to retain many of the features found in its best-selling iPhone 5. The product includes a 4-inch Retina display, Apple's A6 chip and an 800-megapixel camera, all inside a polycarbonate shell.

Chinese consumers wanting a lower-priced iPhone should instead look at Apple's iPhone 4S, which starts at 3288 yuan.

On Wednesday morning local time, Apple will hold a media event in Beijing to reveal further details of its iPhone plans for China.

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