IPhone Price Drop Could Give Apple Big Lead in China

Don’t underestimate Apple’s growth story in China, especially when it comes to the iPhone. Because according to Morgan Stanley’s latest AlphaWise survey of China’s handset market, demand for smartphones there is taking off and Apple is in a perfect position to reap the benefits.

Of the 2,029 Chinese mobile phone users the research house interviewed, 87 percent said the next phone they purchase will be a 3G device, and 30 percent of those said they expected that device to be an iPhone, even at its current price, which some feel is high. When price was removed as a consideration, the number rose to 53 percent.

Which is interesting, because not all vendors enjoyed such a spike with that factor eliminated. Research in Motion, for example, claimed the second-largest increase, with a jump to five percent from three percent. Meanwhile a number of vendors included in the survey all saw their share decline. Without price to consider, 20 percent of respondents said they’d opt for a Nokia handset, down from the 25 percent that said they’d do so when price was a consideration. Same thing with HTC. Told to consider price, seven percent of respondents said they’d prefer an HTC device. Told not to consider it, their number dwindled to five percent. Samsung too, lost a percentage point in the price-is-no-object scenario, slipping to four percent from five percent.

And with Apple’s 23 percent increase, it’s pretty clear where all that lost market share ended up. If price weren’t a consideration, or if carrier subsidies or price reductions made it less of one, the iPhone might claim a significant lead in the Chinese market. Because according to Morgan Stanley, if the iPhone comes down in price, demand for it in China increases even if rival devices match the drop in price.

Perhaps it’s time for that much-disputed iPhone nano after all.