iPhone SE: Why Apple really brought out a pocket-friendly iPhone
Rajiv Makhni on the real strategy behind Apple bringing out a pocket-friendly, sasta iPhone.brunch Updated: Apr 03, 2016 14:00 IST
Irrespective of which phone I’m reviewing, I’m almost always called an Apple-hater or Apple-lover in the same breath. Review a good set of Android phones – and I’m an Apple-hater, and then in the very next minute, I’m also called an Apple slave.
Do a comparison story between a new Apple product and its competition – and it’s guaranteed that I’ll be hit with both labels again. Thus playing devil’s advocate, I’m going to argue both sides of the story all by myself this time. Here’s my Apple-hater/lover story on the all-new iPhone SE.
The sasta edition
This new Special Edition phone was launched at a typical Apple event with almost no surprises. For countries such as India – where Apple’s market share is small but growing – this was to be the special rocket to boost sales sky-high.
A phone that would have the right mix of top-of-the-line features and economical pricing. A phone specially built to tap into the huge consumer base in India, which wants a just-launched iPhone, but doesn’t have 60K to spend. People started to refer to it as the iPhone SE; as in ‘Sasta Edition’.
The press conference started with typical Apple chest-thumping on how many people worldwide were using Apple devices. An extraordinarily long time was spent on environment and health (usually a sign that they weren’t going to launch too many products), Apple Watch prices were slashed (not a good sign), new Apple Watch straps were launched (to thunderous applause !?) and then came the SE. And it shocked the world.
This was no watered-down, low-spec, small-features phone. This was pretty much their top-of-the-line flagship iPhone 6S repackaged in a smaller 4-inch iPhone 5’ish casing! Then came the price that blew the roof off. An unlocked price for a starter SE was just $399. Converted to Indian rupees, that was about Rs 27,000. Apple then dialled the magic to a whole new level by releasing the India price.Rs 30,000 only including taxes! Wow! Could it be? Had it finally happened? Had Apple become the disruptor?
Had they finally understood markets like India? Was this the new super-aggressive Apple that was going to take the Indian market and make everyone else including the China brigade blink? Unfortunately not!
Within minutes came the denial. The price was 39K for India. Huh? Even with all the duties and taxes, how was $399 translating to almost Rs 40,000? More importantly, it also showcased the fact that Apple hadn’t learnt any India lessons at all. In the world’s most action-packed smartphone market, where Apple had released the iPhone 6S at a very high price, and then poor sales had forced it to drop the price – this was Apple behaving in a very fruity manner again.
Critically, it was also creating a big grey market for its products. The same phone would be available in the US, Dubai and other markets for about Rs 27,000. A Rs 12,000 difference is a lot of money for the ‘we import but pay no custom duty’ specialists of the country.
The Apple-hater argument
Apple has increased its market share in India, but has done it mainly from sales of previous-generation products sold at a staggeringly low price. The SE could have been the begining of Apple becoming a real player in the region. A great phone at an awesome price could have triggered serious market share for them. At Rs39,000, the SE is neither here nor there. With serious online discounting going on right now, its very own flagship iPhone 6S is available for Rs 40,500 and is easily a much better buy.
Many phones from other companies beat the pants off the SE right now for half the price. And the Samsung S7, what some call the best phone in the world right now, is just about Rs 5,000 more. SE is a confusing product, with a previous-generation look, doesn’t sit comfortably anywhere in its portfolio, represents a great missed opportunity for Apple and may go down in history as the iPhone Strange Edition.
The Apple-lover argument
Apple has a real strategy behind the SE. It has chosen not to do a watered-down, poor-specs version of a phone. Instead, it has come up with a great phone from the inside, put it into a more portable 4-inch form factor and priced it aggressively with a US$ base price. Apple doesn’t want people to believe that it’s doing a cheap iPhone as that would take away from the premium brand image that Apple carries (this is very important to Apple).
Thus it has priced it high in India to give it an aspirational positioning, and will drop price very soon just like it did on the 6S. If the SE comes down to about Rs 28,000 in 60 days, it will have achieved all its objectives. Kept its premium position, made the SE very aspirational, come up with a product more affordable than any new iPhone before and start to sweep the Indian market. This is Apple playing a special strategic game at levels other players can’t even dream of, thus making this truly the iPhone Special Edition.
Which of the two scenarios painted here turn out to be true, only time will tell. What I can tell you for sure is that it’s time for your comments. Let the bouquets and brickbats begin.
Rajiv Makhni is managing editor, Technology, NDTV, and the anchor of Gadget Guru, Cell Guru and Newsnet 3
From HT Brunch, April 3
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