Taiwan: Apple Can’t Tell Us How to Price Our iPhones

Source: Apple.com

Taiwan’s Fair Trade Commission has fined Apple (NASDAQ:AAPL) 20 million New Taiwan dollars (the equivalent of $670,000) due to Apple’s interference with mobile providers’ iPhone pricing practices, the Commission announced on Wednesday, according to the Wall Street Journal. The Commission said that Apple violated Taiwan’s Fair Trade Act by telling the country’s top three mobile providers — Chunghwa Telecom Co. (NYSE:CHT), Far Eastone Telecommunication Co. (FETLF.PK), and Taiwan Mobile Co. — how to price the iPhones sold on their networks.

In a statement seen by the Journal, the Commission said that Apple has no right to tell companies how to price the devices after the wireless providers have already paid for the rights for the iPhone. The Commission said that Apple’s Asia unit told carriers how to price both their iPhone contracts and the device subsidies.

According to Reuters, this is the first time Apple has been sued for what has become a traditional practice for the company. Apple has restricted the price of iPhone contracts on carriers for years to stimulate sales of the pricey phones. The Journal said Apple couldn’t be reached for comment on the matter.

Last week, Apple’s long-awaited distribution deal with China Mobile (NYSE:CHL) finally became official, giving Apple even broader access to the world’s largest smartphone market. Analyst opinions have differed as to how many of the devices Apple will sell in China due to the deal — with some noting the extremely high cost of both the new iPhone 5S and iPhone 5C that will put the phones out of reach for many Chinese consumers — but there has been a general consensus that Apple’s financial results will benefit from the partnership. China Mobile is the world’s largest wireless carrier.

Analyst estimates as to how many iPhones will be added in the next quarter via China Mobile have varied between 17 million and 24 million units.

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