Appleit’s (AAPL 1.30% ) The all-new iPhone SE isn’t the best device to roll off the company’s assembly lines, but it was never meant to be one. The company has resurrected a tried and tested formula that worked well last time around.
An entry-level iPhone priced at $399 had has proven itself Four years ago. This time it was supposed to help Apple tap into the rapid growth mid-range smartphone space in price-sensitive markets like India.
The good news is that Apple seems to have found the recipe for the latest iPhone SE law. The device packs Apple’s latest A13 Bionic processor into the iPhone 8 chassis, just like the rumor mill had planned. The price is also attractive – the base model starts at $399 (as does the 2016 iPhone SE). This puts the iPhone SE in an ideal position to take advantage of India’s booming mid-range smartphone market.
However, the sad thing is that the device might not attract customers in India as its price is high.
Image source: Apple.
Apple’s pricing error
According to the Apple India website, the base iPhone SE model starts at 42,500 Indian rupees (about $555 at the current exchange rate). The price in India is about 39% more expensive than in the United States. This could effectively kill Indian consumers’ interest in the device, as the iPhone SE is dangerously close to other high-end smartphones in terms of price for this market.
For example, the OnePlus 7T, priced at less than 35,000 rupees (about $457) seems like a much better deal. The OnePlus device features a triple rear camera setup, a 6.55-inch AMOLED (active-matrix organic light-emitting diode) display, and a larger storage capacity of 128GB, compared to the base model’s 64GB storage. of the iPhone SE.
Other devices such as Samsung’s Galaxy S10 Lite and offerings from Chinese OEMs (Original Equipment Manufacturers) have also undercut the iPhone SE in price, while still offering higher specs. In short, Apple’s iPhone SE does not offer Indian consumers a value for money proposition, thanks to the premium the company charges in India.
There are several reasons why Apple was unable to price the iPhone SE at $399 (about Rs 30,500) in India. First, the Indian rupee has depreciated sharply this year against the US dollar, making imports expensive. Second, the Indian government levies a basic import duty of 20% on iPhones. Last month, the government added a 10% service tax on top of existing import duties, a move that made iPhones even more expensive in India.
So Apple probably had no choice but to price the new iPhone SE to a point where it might become irrelevant in India, given the competition.
Image source: Getty Images.
iPhone SE price needs a haircut in India
The mid-range smartphone segment in India has been growing at a blistering pace over the past year. IDC reports that sales of devices priced between $200 and $500 increased by 55.2% in 2019, accounting for 19.3% of total smartphone sales in India.
The iPhone SE might have been the right product for Apple to tap into this segment had it raised its international prices to the Indian market. That may not be the case unless and until Apple finds a way to lower the price and make the iPhone SE affordable in the Indian context.
Historical evidence suggests that Apple might give the price of the new iPhone SE a haircut. After all, the company did well to keep iPhone 11 prices the same as its rivals last year, and it has a history of offering big discounts in India to boost sales.
So, all may not yet be lost for the iPhone SE in India. But Apple will have to act fast and think about lowering the price for the device to stand a chance against more powerful but less expensive rivals. Otherwise, the tech giant the ambition of settle down as a key smartphone player in India will have to wait longer.
The country is in economic shock from the COVID-19 pandemic, and millions of jobs are at stake, so buying a mid-range iPhone at the price of a flagship device would likely be the last thing on people’s minds. Indian consumers. In this market, Apple will have to consider reducing the exorbitant price of its latest device.
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