Apple created headlines with its decision to launch the iPhone 5C, the cheaper version of the iconic smartphone series. The original iPhone which is a flagship product has successfully captivated the hearts of millions across the world. Will the cheaper iPhone manage to emulate the success of the original iPhone? Read on to find out.
Sales Figures For The iPhone Globally Along With Its Popularity Index
In the year 2010, Apple could capture only a paltry 4 percent of the entire cell phone market globally. About 14.1 million units of the iPhone were sold in the third quarter of the same year. Despite the paltry market share it commanded, more than half of entire cell phone sales for the year went to Apple.
The year 2011 say Apple overtake Blackberry was overtaken along with crossing the 100 million sales mark. Apple steadily rose to becoming the prime mobile phone manufacturer globally with regard to their revenue in 2011 and captured a large chunk of the United States market seamlessly.
Sales earnings were the highest on a quarterly basis for the year 2012. The iPhone accounted for 53% of the same, selling to the tune of 37 million units. In 2012’s fourth quarter, the iPhone 5 and 4S collectively sold in excess of 44 million units.
The Cheaper iPhone And Its Market Impact
The iPhone 5C price is a big bone of contention in global markets. The iPhone 5C should ideally be priced between INR 22,000 to INR 25,000. According to experts, these low cost models may well damage the company’s global image. However, sales may jump up initially owing to lower costs. Profit margins on the low cost smartphone will be high enough for Apple and the company should benefit from its low cost smartphone.
Will The iPhone 5C Negate Apple’s Brand Value?
Apple has always branded itself as a premium luxury entity in the global market. The cheaper iPhone might set the tone for some long term brand damage. Erosion of brand value may well dampen Apple’s presence in the Indian market. Many tech enthusiasts feel that Apple is doing itself some long term damage with a low cost iPhone line.
What Can Apple Do?
Many tech experts on the other side of the fence take low end product launches as a natural step for high end luxury tech brands. Adobe Photoshop is one such example. However, the distinctive brand image for luxury brands needs to be protected. Take the example of a Bentley or even a Ferrari. Such luxury brands will never get the desired sales figures with their cheaper versions. Yet, Apple can take the right strategies in order to make the low cost iPhone a success of sorts.
Experts like Peter Fader feel that commercial scope is much higher in the lower end segment of the market. Bringing out a low end iPhone 5C will never damage their premium counterparts.
Apple has always thrived on high end premium smartphones over the years. There is always the risk of undercutting company brand image but sales figures can rise initially due to lower prices. Yet, the premium and cheap brands may work in unison and cater to multiple segments.
The Scenario In The Indian Market
Apple is targeting emerging smartphone markets like Brazil, India, China and the African continent with this affordable iPhone 5C model. Indian consumers would always welcome a device that is prices between INR 22,000 and INR 25,000. However, according to CMR telecoms practice lead analyst, Faisal Kawoosa, market ranking in India will never improve with the introduction of the iPhone 5C.
There is no questioning the global demand for smartphones. Smartphones have ramped up more than fifty percent of total cell phone sales in 2013’s second quarter. Feature phones have been outstripped by a long mile with Asia/Pacific region recording the highest smartphone growth rates of 74.1%.
India is certainly an emerging market that Apple would like to tap. India bound shipments totaled 221.6 million cell phone units for the period between January and December in the year 2012 which included 15.2 million smartphones.
Between January and April of this year, 73.5 million cell phone handsets were shipped to India. This computes to a growth rate of 11.15% just in the first quarter. While Samsung has held on to the number one slot, Apple managed to sold 32 million units in the second quarter of this year with an overall improvement of 10.2%.
Will A Cheaper iPhone Win Big In India?
A cheaper iPhone may not make it big in the Indian market. This may be mainly due to the pricing for the iPhone 5C. Indian consumers would have expected lower prices in spite of Apple’s effort to spread itself in the Indian market. It looks like local biggies and Samsung will continue to dominate a prime chunk of the market. Apple would do well to ramp up sales with even lower prices and greater benefits which would enable them to target the youth who cannot spend a fortune on a premium smartphone.