Whether Apple Should Rely On Its ‘Premium iPhones’ Or ‘Cheaper iPhone’ ??

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As situations depict, Apple’s performance does not seem promising for its shareholders. The company’s stock price dropped to the last one year’s lowest ($460.16) as the end of Feb 15. On the other side, Apple’s latest iPhone 5 doesn’t seem much appealing as it was during the Christmas holiday season. From recent rumors, it seems that the company is planning to launch an inexpensive iPhone to beat out other low-priced smartphone selling vendors worldwide. Of course, manufacturers’ interest towards Android bolstered the OS platform to achieve an impressive market share in smartphone segment last year.

However, an increasing demand of Apple’s iPhone in emerging markets like China is still promising for Apple’s stock. Undoubtedly, China is one of the biggest market for iPhone, and the company would like to sustain its position in the country. This is the reason why Apple has decided to launch cheaper iPhone (saying iPhone Mini) in emerging markets to compete with other low-priced smartphone vendors.

Now, Google’s Android has become a biggest threat for Apple’s iOS worldwide. In Q4 2012, Android accounted for 34% of overall mobile handset shipments, and contributed 69% of total smartphone sales during the same quarter. In terms of shipments, Android is far ahead of Apple’s iOS in both smartphone and tablet segments. However, throughout the last year, Apple sold respectable 101 million smartphones, which is 74 million less than the number what Samsung sold during 2012. The South Korean company recorded a whopping 78% Y/Y growth in Q4 2012, leaving Apple in dust. In the context, third largest smartphone vendor—Nokia—shipped just 35 million smartphones during the entire last year. More importantly, the Finnish handset manufacturer is also currently considering about Android for its future smartphones.

This time, Apple is also afraid with the prevalence of cheap smartphones especially manufactured by Chinese vendors like Huawei, ZTE and Lenovo. On the other side, three Chinese vendors—Huawei, ZTE and Lenovo—were among the top five smartphone vendors in Q4 2012. Also in Apple’s second largest market (China), 80% of smartphone market is being dominated by Android.

Huawei is the world’s second largest telecommunication equipment manufacturer and ZTE also has a good amount of experience in the mobile industry. On the other side, Lenovo is known for selling laptops; the company succeeded to grab first position in terms of PC sales in Q3 last year. Of course, none of these Chinese vendors are vulnerable compare to Apple in any aspects–either technology or innovation.

This time, BlackBerry Z10 is also available in the market, and it might entice Apple’s corporate users. As per a recent estimation, 20 million BlackBerry 10 devices are expected to be shipped by the end of this year. Apple investors might hope that low-cost iPhone, a cheaper entry-level model, with strong app ecosystem could lure a significant number of mobile users in emerging countries like India, where iPhone is still considered as an expensive product.

According to a Boston consultancy group’s report, there’re 120 million people in China having disposable income of $20,000-$40,000, and the number is expected to grow upto 280 million in 2020. It has been noticed that iPhone is quite popular among these affluent classes, and Apple could realy on its brand value.

iPhone 5

At present, it seems that Apple is losing grip on its biggest market–the U.S. According to a recent survey report, Americans are more likely to use high-end Android smartphones such as Motorola Atrix HD and droid Razr M than iPhone 5. This is the reason why the Motorola Atrix HD and Droid Razr M were at the first and second positions receptively in term of users’ satisfaction, followed by HTC Rezound 4G and Samsung Galaxy Note II. In the contrary, Apple’s iPhone were placed at the fifth position in terms of users’ satisfaction.

Furthermore, in the UK market, HTC One X succeeded to hold first rank in terms of users’ satisfaction, followed by iPhone 5 and Samsung Galaxy Note II.

Anyway, Apple has always been known for premium product manufacturer. The company is currently lashed out for its product due to lack of innovations. This time, the company needs to focus on innovative products to win consumers’ heart rather than to launch cheaper iPhone.



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