Apple last year introduced a new phone that was different from what it had been selling till then. The iPhone X was bezel-less, killed the home button and was the most expensive phone Apple had ever put in a box.The success of the phone seems to have taught Apple one thing, when it comes to a premium phone the price elasticity is more and people seem to be okay pushing themselves to buy a more expensive phone, as long as they see value in it.
In fact, the iPhone X sold so well that it helped push Apple’s average selling price above $700, despite it still selling older models like the iPhone 6 across the world at much lower price points. This also helped Apple’s cause by making the market happy enough for the Cupertino tech giant to become the first company to be valued at over a trillion dollars.
This is why we should stop expecting Apple to launch a cheap iPhone for the masses. While markets like India might expect Apple to launch a new phone to rake in numbers, it is becoming increasingly clear that such a strategy does not fit into Apple’s scheme of things anymore.
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It is sitting pretty as the world’s largest premium smartphone seller, maybe the only one left. The allure of that spot, where lower volumes in the coming years might not mean a fall in revenue, is so much that you see more budget brands are looking that side with $1000 smartphones. Don’t expect Apple to squander its advantage so fast.
Thomas Husson of Forrester Research is of the opinion that Apple masters the art and science of managing the lifecycle of its products. “The new line-up of iPhones is likely to do just that: Apple will expand the iPhone X design and naming across its phone portfolio, with more sizes, colours and price points,” he said in a mailed response to indianexpress.com. “Don’t expect massively disruptive new features, but a smart pricing repositioning around an enhanced iPhone X, enabling Apple to increase the overall average selling price of its smartphone lineup, including for the rumoured 6.1-inch LCD smartphone,” he added.
That does not mean Apple will not have a budget play. That will be the older models, which become more affordable as times passes and still find takers across the world. With every new launch Apple seems to be able to sell more of the older models, thanks to the so-called “hero effect” where buyers are aspiring for the latest models, but settling for something more within their grasp.
Also, you can expect Apple to soften the blow in price sensitive markets like India by offering access to easy credit and operator plans that make it easier for new users to jump to the Apple ecosystem. If reports are to be believed, this might be the year Apple finally adopts a dual-SIM strategy thus catering to the user requirements in Asia.
Now, with all the rumours around the Apple iPhones, there seems to be an interesting point that everyone is missing. If Apple is indeed going to launch iPhone Xs, iPhone Xs Max and the iPhone Xc as predicted, it is going to be the first year Apple will not have a phone with a screen size under 5 inches.
I think this will be a significant departure not just for iPhones, but the smartphone industry has a whole. The options available for those who want a smaller screen size are slowly becoming lesser and I’m not sure it is a good thing. There are those who have small hands and prefer something they can grip better.
Yes, this works well for the smartphone and internet industries as the latter does not have to focus on these sizes for screens and chassis anymore, while the latter can look at better ad revenues from the larger screens. In fact, if you didn’t know, one of the main reasons for the push towards screen sizes larger than 5 inches was the requirement to improve the effectiveness of mobile advertisements and not really convenience of the user. So with larger screen smartphones there will at least be better revenue for the mobile internet.
Disclaimer: The writer is in San Jose, California on the invite of Apple India