Could rise to 10 million with pre-paid options

Apple should be able to sell at least 4 million iPhones per year in China, argues Morgan Stanley analyst Katy Huberty. The country is said to have 50 million potential iPhone buyers, and a new survey conducted by Morgan Stanley suggests that anywhere between 4 to 5 million people may be prepared to buy new hardware every year. Adding pre-paid options could potentially double sales to 10 million, according to the survey.

Pricing is recognized by many analysts as the iPhone's major obstacle in China, given that much of the population is poor, and even the middle class may not be able to justify the costs involved. "Hardware pricing, service plan pricing and the large up-front payment were cited by 85%, 66% and 56% of [survey] respondents respectively, as reasons they were not likely to purchase an iPhone," says Huberty. The analyst notes that about 2 million unlocked iPhones are in the country; most of these are known to be gray-market devices, bought for about $550 to $820 in areas like Hong Kong.

Earlier this week Apple revealed that over 200,000 iPhones have been activated in the country so far. Based on this Huberty proposes that Apple could sell upwards of 1.2 million units in China by the end of the first year, or more should China Unicom marketing efforts persuade the public. The local version of the phone may soon regain Wi-Fi.

by MacNN Staff