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Why iPhones are actually cheaper in China than the US (INFOGRAPHIC)

Paul Bischoff
Paul Bischoff
10:47 pm on Sep 16, 2013

China’s second largest telco China Unicom announced today it will offer packages for customers to receive a free iPhone 5S or 5C with a contract. The catch? The contract is three years long for a 5C and 30 months for a 5S, and you have to buy a high-end plan.

Unicom’s slightly smaller competitor China Telecom announced the preorder of iPhones on its network before the devices were even revealed. Its prices are slightly cheaper. Details of China Mobile getting its first ever TD-LTE iPhone for the upcoming national 4G rollout are still unclear but expected soon.

Despite heavy criticism about the iPhone 5C not being cheap enough in China, the new contracts bring down the price to a nearly level playing field with Western countries, even if the plans cost more than what Chinese people are used to. Most Chinese data plans are cheap, limited to just 300MB. The more expensive plan required for a free iPhone offers roughly triple the data for triple the price. Will China Unicom and Telecom be able to lure more customers to its pricier packages for a three-year commitment?

I decided to do the math. Even though iPhones are much cheaper in the US, data plans are far more expensive (typically $60 per month). That means over the course of two years, the total cost of owning and using an iPhone is actually more expensive. That includes the price of the iPhone and what you pay over the course of two years combined. On the upside, contracts typically only last 24 months. Of course, buying any unlocked smartphone in the US without a contract is extremely expensive. See my infographic below for the breakdown.

iphone cost

Hat-tip to Techweb (article in Chinese).

For more fun graphics like this one, check out previous entries in our infographic series.

(Editing by Willis Wee)


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Have Your Say
  • http://twitter.com/BienPerez Bien Perez

    Good job. MT : Why iPhones are cheaper in China than in the US (INFOGRAPHIC) http://t.co/BVAvekcWNY http://t.co/i0u0TZtHDX

  • Beijing Koala

    The picture of iPhone 7 is inaccurate. It needs to be twice the length shown.

  • neokhark

    the infographic should be $48*36months = $1728 for 5C $63*30months = $1890 for 5S in CHINA.

  • Paul Bischoff

    @neokhark: You are correct that the contracts for iPhones in China are longer (30-36 months), but I opted to compare the total cost of ownership based on an equal 2-year period across the board.

    -Paul

  • Peter Carney

    The whole article is misleading. If you want to purchase just the phones they are more expensive in China. If you want to sign up for contracts and get the phone it will also cost you more money in China. I’m quite sure you can’t just opt out of a three year contract after two years unless you want to pay the penalty. Comparing the phones over a two year period is pointless. If you want to get an iphone 5C or 5S in China it will cost you more money than in the US. Not to mention you are comparing unequal data plans 950MB/1.3GB vs 2GB in the US.

  • Kevin P

    @Paul Bischoff China Unicom actually offers 2-year contracts. But you get a lower subsidy and/or have to sign up for a higher monthly payment, which puts the TCO for the 5S above the US total. The Chinese 5C price still works out as $10/month below the US, but the American plan has more than twice as much data, unlimited minutes and unlimited texts.

    To be honest it’s a pretty difficult mistake to make – the table on the page you linked clearly gives the numbers for the 24- and 36-month plans. They’re even in the same table, but you’ve still somehow managed to take the prices from one and link it up with the duration of the other.

    Your numbers for the pay-up-front option are similarly misleading. You’ve reduced the Chinese monthly price to the cheapest plan you could find, which is fair enough, but you’re comparing that to a high-end US plan with over 6 times as much data, unlimited minutes compared with 50, and a phone subsidy that for some reason you’re paying for but not taking advantage of. Why don’t you also switch the US plan to a cheaper package that doesn’t include a phone subsidy – T-Mobile’s $30/month deal, perhaps? Again, it still works out slightly under $10/month more expensive than the Chinese total over the 2 years, but that’s way less than the number you cited, and it comes with 100 minutes (twice as many as the Unicom package) and unlimited data compared with 300 MB.

    Overall, not one of the better articles I’ve seen on this site. And your reply above is nonsense too. A subsidized phone contract is just a fancy way to package a loan. You can’t ‘compare the total cost of ownership based on an equal 2-year period’ without taking into account that one option leaves you with >$750 of debt still to pay back.

  • Paul Bischoff

    @Peter Carney: The infograph clearly states the China Unicom contracts I cited are 30 and 36 months-long, and the TCO is after 2 years of ownership. Most US customers would buy into another plan after their previous one expired anyway, or pay even more on a monthly basis. The graphic also clearly states the data amount. There is nothing “misleading” here.

    @Kevin P: Yes, China Unicom has many other plans. I am using the contract required to get an iPhone at no cost. Talk and text do not figure into my comparison, but the data amounts are all clearly marked. The $60 plan for US smartphones is fairly standard across the US, despite their being cheaper plans for the minority of people who use T-Mobile.

    Indeed, I could have spent a lot more time making a massive graphic with every plan on every carrier comparing every last detail. But this is not shopping advice for the prospective iPhone buyer. This is a straightforward and correct comparison of the cost of ownership between the two countries using the most common subscription plans.

  • Kevin P

    @Paul Bischof – It’s not just that Unicom has other plans, it’s that Unicom has other plans which can be compared directly with the US ones you mentioned, rather than leaving the user with thousands of RMB worth of debt after the 2 years. As I said before, a phone subsidy is basically a loan. If you borrow money with a 3-year repayment plan, it’s hardly surprising that you come out ahead if you only count 2 years worth of payments.

    Not only that, but the very page you linked to lists separate prices for 2- and 3-year contracts. If you sign up for a 3-year contract you get the phone for free, if you sign up for a 2-year contract at the same monthly fee you have to pay some money for the phone. You’ve used the cheaper 3-year price, but decided to only count two thirds of the payments. Again, both numbers come from the same table, so it’s hard to argue you didn’t know about the 2-year option.

    And yes, most US users would sign up for a new contract after the 2 years. But at that point they get a new phone as well, so it’s hardly a fair comparison. And among the minority that buy an unlocked no-contract phone the proportion I would expect most users are paying far less than $60 per month (that’s the whole reason to buy an unlocked phone, after all)

    Here are the actual numbers, in case anyone is wondering.

    5S (24 month contract):
    799 RMB + 386 RMB/month (1.3 GB, 1250 minutes) = 10,063 RMB = $1,643 USD
    or, 0 RMB + 586 RMB/month (2 GB, 1950 minutes) = 14,064 RMB = $2,297 USD if your purpose was really to “use the contract required to get the iPhone at no cost” rather than to write a linkbaity headline.

    5C (24 month contract)
    1,099 RMB + 286 RMB/month (950 MB, 900 minutes) = 7,963 RMB = $1,301 USD
    or 0 RMB + 386 RMB/month (1.3 GB, 1250 minutes) = 9,264 RMB = $1,513 USD

  • Wesley

    Cheaper or more expensive, the average Joe in China can’t afford it because the average yearly salary is around 6000-8000$ USD.