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What do the new iPhone launches mean for India?

So the new iPhones were launched two days ago (Sept. 12), and we know all the specs and features. In fact, the elements of secrecy, shock and awe were missing, thanks to leaks of these details on the Internet. We also know the approximate prices for these phones in Indian Rupee terms and the India launch dates. So these are no longer the questions that are being asked by the well informed and well read consumer in this part of the world. The questions that are being asked are, how will these new phones help Apple boost its market share in an Android dominated market, like India. And with the new phones pricier than ever, who exactly will buy them in India, once they become available at the end of September (iPhone 8) and early November (iPhone X)?

Let’s start with the targeted audience — who exactly will buy the new iPhones in India? As we know, Indians are highly value conscious and look for Paisa Vasool. (That’s slang in Hindi for ‘bang for the buck’ or maximum value for money.) So if I am getting a feature loaded Android phone, with 20 MP rear camera, OLED display, 3,3000 mAh power, Octa core processor, 6 GB RAM, 64 GB storage — all for Rs 32,000 (approx. $500), why would I spend double that amount for the basic model of iPhone 8? The model I am referring to is One Plus 5, and you can check the specs for yourself here.

We also know that Apple does not make the most technology superior phones before anyone else. Yes, their phones are beautiful, made with the highest quality standards, good material, and they are simple to use. But there are other phones that cost much less and yet offer better features. For instance, dual cameras and OLED displays were long available on Android phones. So Apple phones are no longer about superior features.

Now back to the question: Who will buy Android phones in India?

Well, I know people who go teary-eyed when talking about Apple and its products. They have fond memories of the early days at Apple and about Steve Jobs. They belong to a tribe, a cult, who will always buy Apple products. The other type of Indian who will buy Apple’s new phones is the one who has tons of cash — there are many millionaires and billionaires in India. For them, owning an Apple device is just as important as owning a Jaguar or Mercedes car. It is a status symbol. Industrialists, businesspersons, advocates, Bollywood actors and politicians will buy the new Apple phones.

Having answered the first question, I move on to the second: Will the new iPhones increase Apple’s market share in India?

In the past year, India became a strategic and key market for India. It used to be our neighbour, China. But the Chinese market is now saturated, and there are hordes of contenders who challenge Apple’s supremacy, with phones that are more feature loaded. As I mentioned earlier in this post, Apple phones are no longer about revolutionary technology. Of course, when the iPhone was first launched, ten years ago, the industry saw nothing like it earlier. That was revolutionary. We also saw revolutionary technology with the iPod, iPad and Apple Watch. But that is no longer the case.

Apple phones also belong in the premium segment and are not mass market products. For that, you have a plethora of Indian and Chinese phones. The new iPhones are priced nearer to $1,000 and push them further ahead in the premium segment. So, Apple will sell a lot of the new phones in India, but that won’t increase its market share significantly in India.

In fact, Apple could lose out in other markets that it long dominated, like the US. If you were to travel to the US and observe what phones people use there, you would notice that even taxi drivers, waiters and hotel staff use iPhones. That’s because they have not paid the full amount for their phones upfront. They are bought with a plan from a telecom service provider, and their cost is absorbed into the monthly billed. The phones are ‘locked’ to a particular service provider.

But with the new iPhones costing as much as $1,000, I am betting that a lot of Americans will shift to Android phones. Yes, Apple is going to lose market share in the US.

Apple knows all this. In fact, its strategy is to cut the prices of previous models whenever it launches new models. So you will see more sales of iPhone 7 in India!

Apple also tried to launch a model that’s within the affordability of more Indians — the iPhone SE. In fact, this phone is manufactured in India.

So sales of more iPhone 7 models are what we can expect (because in the next few days, prices are going to come down).

Cash back also works well in India, and Apple has tied up with leading Indian banks and credit card companies to sweeten the deal.

Finally, in closing, I must mention that Apple phones have a high resale value. So your old iPhone can still fetch you a decent amount, should you decide to sell it.

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Brian Pereira

Brian Pereira has over two decades of journalism experience. He is the former Editor of CHIP and InformationWeek magazines in India. You can write to Brian at: brian9p@gmail.com Twitter: @brian9p Linkedin: https://in.linkedin.com/in/pereirabrian

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