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Despite challenges, strong iPhone demand expected in China

Wednesday, 15 Jan 2014 | 2:59 PM ET
Tech Yeah! Strong demand expected for iPhone in China
Wednesday, 15 Jan 2014 | 1:00 PM ET
CNBC's Josh Lipton and Re/code Senior Editor Arik Hesseldahl discuss how the iPhone will be received when its available to China Mobile customers on Friday.

China Mobile will start selling Apple's iPhones in China on Friday, and while the devices may be pricey, the companies still expect strong demand from the carrier's 760 million customers.

China Mobile acknowledge to CNBC that the iPhone on its plans may bemore expensive than the phones offered by its competitors, and Apple CEO Tim Cook emphasized its focus on the quality of its devices as opposed to the number of customers it reaches, but demand for the Apple brand in China is clear, according to Arik Hesseldahl, senior editor at Re/code.

"For Apple, it's always been about making the best products and not making the most. And so we want people to have an incredible user experience with our products," Cook told CNBC in an interview. "This is what's important for us."

Apple's iPhone 5S
Image source: Apple
Apple's iPhone 5S

The companies may have to rely on discounts on phones to boost sales to Chinese consumers, however.

(Read more: Apple-China Mobile deal a 'watershed' moment: Tim Cook)

"I think this is where the subsidies will come into play much as they do here [in the United States]. Apple tends to want to build relationship with its end user and so will do its best to structure deals with China Mobile that lessen the initial price sensitivity. But it's clear there's demand for the Apple brand," said Hesseldahl. (NBC News group is a minority stakeholder in Re/code and has a content sharing partnership with it.)

Another point on Apple's side is that many consumers in China already use smartphones more than they use PCs, Hesseldahl noted.

"This is one of those markets where your phone may be your first computing device," he said.

Apple faces competition from the likes of Samsung and Lenovo, whose smartphones run on Google's Android operating system, according to Hesseldahl.

"But Apple already has a toehold with about 5 percent of the market as it stands," Hesseldahl said. "The other players will respond, but competition has never once fazed Apple."

—By CNBC's Althea Chang.

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