After months of toil, Apple has kickstarted the process of assembling its iPhones in India. According to Wall Street Journal, who’s received confirmation from Apple Inc., a first trial run for the assembly line in the country has been officially completed. It means Cupertino is almost ready to attract the large 400+ million Internet users towards its most affordable offering, iPhone SE.
While the assembly line, which requires the company to source 30 percent component locally, is now functional but the pricing and availability of the iPhone SE are still unknown. This device sells for $399 a pop in the United States while Indian e-tailer and offline retailers are already selling it at a discount, around $320. The devices are being assembled by Taiwanese contractor Wistron, and as expected, the device will begin shipping this month itself.
The government hopes that Cupertino will further slash the price by about $100 to make it affordable for the Indian masses. Since, the primary aim of the company, whose iPhone sales are flailing, is to capture an enormous section of the society with its cheapest iPhone SE device. This assembly line could also help Apple increase the sale of its cheapest iPhone in other South Asian regions as well.
But, Apple has been opposed to the idea of giving up on its profit margins on the iPhone and has now started to make money on the devices to compensate for the slowdown in the market. The Cupertino giant will, however, have to rethink its marketing strategy for two very important points — one it is not selling its latest and best device to India, second, some people tend to see value-for-money over premium brands. It may have to change its stance on its internal beliefs to make way into the Indian markets.
We all know Apple is a premium smartphone brand and the same has been established among the masses, who furnish the iPhone as a status symbol in our society. But the advent of Chinese manufacturers and their feature-loaded budget smartphones has led to an upheaval in the market. Xiaomi, Vivo, and LeEco among others have marketed features instead of brand, creating value for their business in the fast growing smartphone market of the country.
Currently, according to the latest report from IDC, the Chinese pack is being led by everyone’s favorite — Xiaomi, but the combined market share of the said device makers reaches over 50 percent. Samsung continues to lead the market with a massive 38 percent share while Apple’s share still amounts to a measly 2 percent in India. The average price of the smartphone, however, stands over $155 — increased from $120 about a year earlier.
In addition, there have recently also been speculation that Apple is planning to establish an official online presence in the country. With the iPhone SE, the company will also debut its digital marketplace to sell its device (s) directly to the netizens of India. This plan is feasible as compared to offline stores as Apple does not require regulatory approval for foreign direct investment (FDI) in retail. The government allows manufacturers to directly sell locally manufactured models online.