The Apple invites for the March 21 event had the tagline “Let us Loop you in”. In all probability it alluded to the venue of the event, 1 Infinite Loop, the location of Apple’s headquarters in Cupertino. But was Apple also in a way telling you they were in a loop of recurring themes.
The iPhone SE, without doubt, the most significant of the announcements during the day, was a throwback, bringing back the once popular 4-inch form factor. Apple did that also with the new iPad Pro 9.7-inch, the size in which the Apple tablet was launched in and sold 200 million devices of.
Even as CEO Tim Cook started the event by announcing that he was ready for a long fight over encryption of Apple devices with the US security agencies, the event suggested that they were able to give in on some things, like price for instance.
In fact, the iPhone SE is the cheapest launch price for an Apple smartphone at $399. The story, for a while, got even better for the Indian customer as Apple initially announced that the 16GB version of this phone would be priced in India at a very aggressive Rs 30,000. However, the price was later corrected to a more Apple-like Rs 39,000.
Analysts still see this as a good price. Rushabh Doshi of research firm Canalys told IndianExpress.com, that the phone addresses untapped potential in the 4-inch premium segment market in many countries. “The pricing, albeit lesser than the larger iPhones will appeal to the price-conscious, who are yet looking to associate themselves with a premium brand. While the iPhone SE is the most affordable iPhone at launch, its pricing strategy in markets outside the US will be important for the SE to be a popular choice for first time iPhone users,” he said.
While, Doshi said, the price in India has almost a 50 percent premium over the US pricing, “users will wait for subsequent price cuts before laying their hands on an SE, waiting for it to become more affordable”. He said that given the healthy ‘resale’ market status that Apple enjoys in price-conscious markets like India, the SE will have to compete against a resold iPhone 6 and 6S. The phone, which uses a chassis very similar to the iPhone 5s, has specs and components of the newer iPhone 6s, including the A9 chipset, 12MP camera and fingerprint scanner.
Tim Bajarin, president of US-based Creative Strategies, Inc, is positive about the new phone as it has “the same technology that is in Apple’s newest iPhones and is the lowest cost premium phone in their line”. “There is pent-up demand for a 4-inch phone and one with this level of features will be a big hit and drive many who have been on the sidelines to finally upgrade if they resisted the large iPhone designs,” he added.
Bajarin said the new iPhone is “especially focused on their expanding into emerging markets and is the first iPhone they will use to start growing their market share in India”.
While agreeing that the price is still a bit high for some markets, he said, Apple is an aspirational brand and even in emerging markets there is interest in iPhones. “I see India as Apple’s next major market and over the next three years they will put a lot of time, money and energy into expanding their market share in India. And, they will eventually drive these prices down and make them even more affordable for all emerging markets and use it to grow Apple overall iPhone market share and ecosystem.”
Anshul Gupta, Research Director at Gartner too thinks the phone will help Apple broaden their market segment. “Users will be able to buy a phone with latest features which is very different from buying an older version at lower price. I think this will appeal more people to buy an Apple phone who otherwise couldn’t afford their flagship phone. This will make market more competitive at that price point as Apple is preparing to take more share,” he said.
Faisal Kawoosa, General Manager, Telecoms & SemiTronics at CMR, is of the opinion that Apple should have made its intentions for India more clear by launching the phone in the first wave itself. The phone is now coming to India on April 8, almost a couple of weeks after the launch, which is still faster than earlier launches.
“In India, Smartphones above Rs 30,000 contribute just a little over 3% to the market. Plus, India is a phablet obsessed nation and 46% of the Smartphones sold in India have a screen size of 5 inch or more,” he underlined, suggesting life might not be that easy for the “most powerful 4-inch smartphone”. He says that even if it grabs 100 per cent of the opportunity around the price range it is in, Apple would make a market share of 3.5-4 per cent, as against the existing 2.1 per cent.
The other significant announcement was the price cut on the Apple Watch. Despite being the most popular single smartwatch model in the world now, it hasn’t seen significant uptake in countries like India. With the new price, this wearable could find more adoption in emerging markets.