Special edition or
Strange edition?
The real
strategy behind Apple bringing out a pocketfriendly, sasta iPhone
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.
Identity Crisis? Priced at `
39,000, the Special Edition iPhone is neither here nor there
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 SHOCKER
The press conference
started with typical Apple chest-thumping on how many people worldwide
Rajiv Makhni 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 ` 27,000. Apple then dialled the magic to a whole new level by
releasing the India price. ` 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!
FLIP-FLOP
Within minutes came the
denial. The price was 39K for India. Huh? Even with all the duties and taxes,
how was $399 translating to almost ` 40,000? More importantly, it also
showcased the fact that Apple hadn’t learnt any India lessons at all. In the
world’s most action-packed smartphone market, where Apple had released the
iPhone 6S at a very high price, and then poor sales had forced it to drop the
price – this was Apple behaving in a very fruity manner again. Critically, it
was also creating a big grey market for its products. The same phone would be
available in the US, Dubai and other markets for about ` 27,000. A ` 12,000
difference is a lot of money for the ‘we import but pay no custom duty’
specialists of the country.
THE APPLE-HATER ARGUMENT
Apple has increased its
market share in India, but has done it mainly from sales of previous-generation
products sold at a staggeringly low price. The SE could have been the begining
of Apple becoming a real player in the region. A great phone at an awesome
price could have triggered serious market share for them. At ` 39,000, the SE
is neither here nor there. With serious online discounting going on right now,
its very own flagship iPhone 6S is available for ` 40,500 and is easily a much
better buy. Many phones from other companies beat the pants off the SE right
now for half the price. And the Samsung S7, what some call the best phone in
the world right now, is just about ` 5,000 more. SE is a confusing product,
with a previous-generation look, doesn’t sit comfortably anywhere in its
portfolio, represents a great missed opportunity for Apple and may go down in
history as the iPhone Strange Edition.
THE APPLE-LOVER ARGUMENT
Apple has a real strategy
behind the SE. It has chosen not to do a watered-down, poor-specs version of a
phone. Instead, it has come up with a great phone from the inside, put it into
a more portable 4-inch form factor and priced it aggressively with a US$ 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 ` 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
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