Apple Attracts Chinese Buyers Offering Web Pay in 2-Year Installments

As it struggles to reach the mid-range consumer market and to compete with lower-cost devices for market share in China, Apple has introduced installment payment plans for iPhone and MacBook laptop buyers, Bloomberg reports.

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According to the newly introduced payment policy, payments for purchases costing between $48 (300 yuan) and $4,800 (30,000 yuan) made through Apple’s Chinese website can be spread over up to two years if the customer holds a China Merchant Bank Co. credit card.

“There is an enormous mid-range consumer market that they are not tapping into,” said Mark Natkin, managing director of Marbridge Consulting Ltd., a Beijing-based market research firm. “They’re trying to figure out how to make products more accessible to that market segment. This is a good step in that direction.”

Apple will let buyers split payments into 3, 6, 12, 18 or 24 installments, with fees being applied only for the latter two installment periods (6.5% and 8.5%, respectively), making devices affordable for Apple’s next biggest market, as Tim Cook said.

As the IDC’s recent report shows, Apple is out of the top five smartphone manufacturers in China as of the third quarter, as it is hard to compete with local buyers who sell smartphones for less than 1,000 yuan. To put this into perspective, the iPhone 5 has a retail price of 5,288 yuan, which is equivalent to about six weeks’ pay for an average urban worker.

Canadians buying an Apple device from the Apple Online Store can also apply for special financing options. For a minimum order of $999, all provinces except Quebec can apply for a “Same-as-Cash” offer, which is convenient, as no payments are required during the initial promotional period of six months. For those living in Quebec, Apple has the “No interest” offer, which requires a minimum monthly payment, during the six-month promotional period.

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