Market Overview

Apple's iPhone 5C Could Boost European Sales (AAPL)

With so much talk about China Mobile (NYSE: CHL) and its absence during Apple's (NASDAQ: AAPL) press conference this week, investors may be overlooking the new markets the iPhone is about to reach.

Most notably, Apple secured a deal with NTT DoCoMo (NYSE: DCM), the largest carrier in Japan.

The Mac maker also made its new iPhones compatible with more of the 4G networks in Europe, which could be one of the keys to expanding in that region.

According to Bloomberg, Apple's lower-cost iPhone 5C could also improve sales in Europe.

The only problem is that the "C" does not really stand for "cheap."

In America, consumers will pay $549 for an unsubsidized iPhone 5C with 16GB. If they want double the memory, they'll be charged $649.

That price is in-line with the price of the iPhone 4S, which was reduced slightly when the iPhone 5 was released in September 2012.

Related: iPhone 5 Trade-Ins To Soar On September 20

In France and Germany, consumers will pay 599€ (roughly $796) for the 16GB iPhone 5C. If purchased in the United Kingdom, they'll pay £469.00 (roughly $742).

This is far from an inexpensive device. It is cheaper than the iPhone 5 was when it arrived last year, but bear in mind that this is not an entirely new smartphone. The iPhone 5C is very much an iPhone 5, albeit with a few tweaks, a plastic body and a handful of new colors.

If consumers are willing to spend a little bit more, they could upgrade to the iPhone 5S, which features two new processors (A7 and M7), an improved camera and an industry-first fingerprint scanner.

The iPhone 5S retails for 699€ (roughly $929) in France and Germany, and sells for £549 (roughly $868) in the United Kingdom.

By setting these high price points Apple was able to maintain its premium pricing status with the iPhone 5C.

Some consumers might feel that Apple has actually elevated its status. By charging a relatively high price for the iPhone 5C, the company may not have to worry about cannibalizing sales for the more expensive iPhone 5S.

In fact, it might work in the opposite way. American customers may be intrigued by the iPhone 5C's colorful appearance but decide to buy the iPhone 5S instead because it offers many more enhancements.

This may not be the case for European customers, who typically buy their smartphones without the help of subsidizes. But will a 100€ savings be enough to persuade them to get an iPhone 5C? That remains to be seen.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ

Posted-In: Apple Bloomberg china mobile iPhone 5 iPhone 5CNews Rumors Tech Best of Benzinga

 

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