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A first peek at the Chinese rate cards for Apple’s new iPhones

By
Philip Elmer-DeWitt
Philip Elmer-DeWitt
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By
Philip Elmer-DeWitt
Philip Elmer-DeWitt
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September 17, 2013, 7:49 AM ET
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FORTUNE — When Apple (AAPL) posted the off-contract price of the entry level iPhone 5C on its Chinese website — 4,488 yuan including taxes and import fees, or more than $730 — Wall Street reacted with something akin to sticker shock, driving the company’s share price down $56 (11%) in less than a week.

After all, this was the device with which Apple was supposed to reclaim its lost market share in the world’s largest mobile phone market. How was it going to do that with a $730 phone?

But now that we’ve seen the first rate cards from China Telecom (CHA) and China Unicom (CHU) — the No. 2 and No. 3 Chinese carriers after China Mobile (CHL) — it’s clear that Chinese buyers will have plenty of opportunities to avoid the full unlocked sticker price. Like AT&T (T), Verizon (VZ) and the rest of the U.S. carriers, the Chinese mobile phone operators are subsidizing the new iPhones — in some cases more aggressively that than their U.S. counterparts.

China Telecom, for example, offers three different plans in which the iPhone 5S, which starts at $199 in the U.S., is free to Chinese buyers — as long as they are willing to lock themselves into a long and relatively expensive contract.

China Unicom has eight plans that offer the $99 iPhone 5C for “free.”

[UPDATE: According to MacRumors, many models of the iPhone 5S, which were available for pre-order in China but not in the U.S., have already sold out in China. Apple U.S., meanwhile, has not issued its usual Monday morning pre-sale sales report, perhaps because sales were light, perhaps because Apple doesn’t want to reveal sales numbers for one new model without the other.]

Zero dollars upfront, its turns out, is also an option in Japan and the U.K., as indicated by the chart below, posted Monday by ISI’s Brian Marshall.

How well the new iPhones sell at those subsidized prices depends on how onerous the monthly charges turn out to be. According to Bloomberg, China Unicom has already taken 100,000 pre-orders for the iPhone 5C. How that compares to the 300,000 orders it took for the iPhone 5 last year won’t be clear until the other new model — the iPhone 5S — goes on sale this Friday.

“Carriers across the U.S. (and internationally) are already offering a wide range of price and plan choices for 5c/5s,” ISI’s Marshall told his clients. “We believe the actual choices consumers have for iPhone adoption (e.g., both upfront and monthly costs) are much more varied than can be captured by a single, unlocked ‘sticker’ price.”

Below: Marshall’s chart.


Click to enlarge. Source: ISI
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