On Tuesday, Apple Inc. (NASDAQ:AAPL) finally put a full stop to all speculations and rumors about iPhone 5C and iPhone 5S design, specifications and price. The company introduced two variants of iPhone, first time in its history, claiming to tap emerging and developed market together. The post-launch debate over iPhone 5C, however, could be upsetting Apple as the existence of so-called ‘low-price’ iPhone 5C is being questioned in accordance to iPhone 5S.
iPhone 5C – a low-cost iPhone from Apple’s perception – is not definitely not a market mover of emerging nations likes of India and China. Apple has listed the unlocked iPhone 5C 16 GB for $549 at App Store in US, while the same device has been listed for $750 in China while in other emerging countries price constraints are no different.
According to a IDC report, the average selling price of smartphones in India will stay below $200 by the end of 2013 the country will emerge as the third largest smartphone market by 2017, following USA and China. And, if Apple decides to keep up standard margin on iPhone 5C in India, it will fail to lure masses, especially when dollar is trading at its best against Indian Rupee. To break the ‘deadlock situation’, Apple has decided to ship iPhone in India at 2012 dollar-rupee conversation rate, according to Bloomberg. This way, though, the company will take the hit of atleast 15% on its margin but the strategy could pay off well if Apple decides to extend the arrangements with new iPhone 5C too.
In October 2012, Apple launched iPhone 5 in India at the cost of Rs. 45,500 when dollar was trading at Rs. 53.50 against Indian Rupee. With such calculation, Apple introduced iPhone 5 in India at $842, a 28% price jump compare to $650 iPhone 5 was listed at on App Store in the US. By maintaining the same margin Apple could introduce new iPhone 5C with a price tag of $680. This could turn around into 36,360 in India rupees if Apple maintains 2012 currency conversion rate.
“A 16GB iPhone, shipped from US to India, attracts additional 17% – 20% of price listed on Apple App Store. A 16GB variant of iPhone 5C is priced at $549, add 7% local U.S. tax on that plus another $30 as shipping charges to India results in $617. Additional 7% customs prices the device $660. If you convert this USD price at current currency conversion rate you will end up paying nearly Rs 40,000 to Rs 42,000 for the iPhone 5C in India.” says Amit Bhawani, Founder of Advices Media, who ships multiple devices from US to India for review purposes.
For a price sensitive smartphone market like India, a smartphone tagged with Rs. 36,000 and above is still a premium device to buy. Therefore, the Korean mobile phone giant Samsung – archival of Apple – has well tuned its price strategy to make its mobile phone offerings best fit for every segment of users in India. And, considering the fact that Smartphone market is already saturating in developed countries, Apple must get its calculations ‘perfect’ to eat into Samsung’s market share.
Apple is yet to confirm the exact launch date of iPhone 5C in India though, speculations claim the device could be available in India as soon as end of September or early next month.