iPhone4 To Help Apple Regain Market Share In India

by CXOtoday News Desk    Feb 06, 2014

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With the smartphone race heating up in emerging markets, Apple is supposedly bringing back the iPhone 4 as a low cost option for customers exclusively in India, Brazil, and Indonesia. The move is aimed at recouping market share from Samsung, especially Galaxy Grand and the S4 mini, as well as other smartphone rivals. An ET report, which quoted an unnamed source informed that Apple’s Foxconn vendor in China has restarted production of the iPhone 4 just for India, Brazil and Indonesian markets.

Price: A Primary concern

Experts believe that the move indicates Apple’s willingness to capture its market in India and other emerging countries where smartphone is becoming a vital tool for business and communication. Over the past months, Apple’s market share in the smartphone market slumped in India and emerging countries, largely because it didn’t have phones that were cheap enough.

A recent survey on India’s most attractive brands for 2013 by Trust Research Advisory (TRA), Samsung mobiles emerged a clear winner at number one, while Apple ranked much lower at number 19. According to Mobility expert Rajiv Batra, despite its good looks, global reputation and premium position, Apple has not been able to find its way into the hearts of the Indian consumer. In contrast what’s working in favor of Samsung or the very domestic Micromax is perhaps their wide range of phones and availability of cheaper options.

“While Indian consumers have also started looking for feature-rich phones, cost is big consideration for them. If I can get most of the features in a less expensive and equally reputed brand, I would certainly opt for it,” he comments.

Apple’s current iPhone lineup includes the iPhone 5S as the top of the line model, the iPhone 5C as the midrange model, and the iPhone 4S and the low cost model. The 4S will continue to be expensive for customers in these countries. In India, the iPhone 4S costs Rs 26,500, while the iPhone 4 will sell at Rs 20,000 - a much more affordable price point. The ET report also claims that the latest stock of the iPhone 4 was manufactured in December last year and new incoming stock would have January 2014 as the manufactured date.

Read: Apple-Samsung Battle Gets Fierce

India: A key market

The report observes that this is the first time that Apple has resumed the production of a discontinued phone. As per its global policy, with every release it company stops the sale of older models. As a result of which the smartphone maker phased out iPhone 4 in October last year from all markets, including India, with the launch of its latest models - the iPhone 5S and 5C.

The move to resume sales and production of iPhone 4 further signifies the rising importance of India’s smartphone market, where Apple saw profit and growth slowed down last year. A Canalys study estimates that Apple had around 2% market share in the Indian smartphone market in the Q4 2013, lagging much behind market leader Samsung, which had a 32% share, followed by Micromax at 21%.

Read: Is Apple Losing Out On Customer Satisfaction?

The research estimates Apple sold about 250,000 iPhones across models in India in the last quarter. Even one year ago – during the same quarter in 2012 - Apple India’s volume market share touched 5% making it the second-largest smartphone maker in India by revenue. Apple CEO Tim Cook also acknowledged India as one of Apple’s fastest-growing markets in his earlier interviews. However, in the October-December 2013 quarter, after the company lost much ground in the country, the company started chalking out some plans to regain Apple’s lost glory in India and the other two markets.

It was then that senior leaders at Apple were convinced that an entry-level smartphone at Rs 20,000 could be the right answer to Samsung’s cheaper handsets that have helped the company boost revenues and sales.