iPhone 5C, iPhone 5S Success in China is the Key for Apple to Turn Back the Samsung Juggernaut
Weeks before the supposed iPhone 5S, iPhone 5C launch, Apple appears bent on making sure that its 2013 flagship, supported by its low-cost sibling, will be a rousing success, chalking up big numbers to slay Samsung.
For the tech giant, the core strategy of playing the Samsung game and beating it rests on China - specifically how the new iPhone models will fare in a country that is currently dominated by Samsung and local device makers.
The Asian economic powerhouse, though experiencing a slow down in the past few quarters, remains the most attractive destination for smartphone market players. In 2013 alone, a pot of $80 billion in total mobile device revenues will be up for grabs in the country where there are about 330 million active mobile phone users, Reuters said in a report.
In four years' time, the potential haul would balloon to $120 billion as some 460 million Chinese consumers are expected to buy new gadgets over the next few years, the news agency added, citing date from research firm IDC.
Clearly, to ascend to the top of the mobile device food chain Apple needs to race against Samsung and gradually convince Chinese gadget users to trust the iPhone brand, brush aside Samsung and other home-made phones.
The tech giant is doing just that, which explains the numerous trips made by Apple CEO Tim Cook to China since inheriting the seat once occupied by Steve Jobs. Mr Cook's meetings with Chinese telco executives were no secret, including the agenda - which is to expand the iPhone footprint in the world's second biggest economy.
One effective way of realising its business goals in China is for Apple to collaborate with network service providers, China Mobile in particular, which has a customer database of 740 million and counting.
Talks between Apple and China Mobile have been underway for some time and little breakthrough is achieved to date as no party seems willing to compromise - Apple is not wiling to adjust its business model while China Mobile is steadfast in not swallowing the bitter pill that the tech giant routinely shoves down into the throat of its telco 'business partners' - hefty device subsidies.
In describing the current state of the Apple-China Mobile negotiations, China Mobile Chairman Xi Guohua told Reuters: "There are still some commercial and technology issues that need time to resolve."
The words somehow hinted that advancement is curtailed by both firms unwilling to cede even an inch of territory. And the icy situation will remain that way unless a breaker comes around.
Enter the iPhone 5C, cheaper than the iPhone 5S but looks and behaves like the latter. With a relatively lower production cost, Apple can offer the handset in a more solid price point, at around $300 as starting, without taking too big of a hit in profit margins.
On China Mobile's part, the prospect of gadget subsidy has become more acceptable because the numbers involve is not too high. Then another lure - it is now able to offer an iPhone that is actually accessible for most of its subscribers that are increasingly becoming more accustomed to prosperity.
In short, the iPhone 5C is Apple's winning formula in gaining new and stable footholds in China, which should be robust enough to back the gradual push for most of Chinese gadget users to move up to the iPhone 5S and perhaps even the iPhone 6 in the not-so-distant future.
Then maybe, further iOS device penetrations will occur and the iPad 5 and iPad Mini 2 will soon establish their presence in China very soon. When that happens, Apple's quarrel with Samsung will become more interesting, taking on a new texture that likely will level the playing field for the two tech titans, in China at least.