ByVishal MathurVishal Mathur
Sep 15, 2024 02:06 PM IST
Indians are spending more on premium phones, a trend reflecting in shipment trackers, and Apple hopes to take advantage of that momentum
It is an unwritten rule. Annual, often even lesser timespan, smartphone upgrades tend to translate into heavier price tags. Be ready to pay more? Examples aplenty, in recent memory too. The Samsung Galaxy S24 Ultra launched at ₹1,29,999 onwards, compared with ₹1,24,999 for the Galaxy S23 Ultra, a year before. Another perspective with Google’s Pixel 8 Pro’s ₹1,06,999 pricing that’s since seen a significant jump to ₹1,24,999 for a similarly spec-ed successor, this year’s Pixel 9 Pro XL. In this business environment, Apple has bucked that trend with its latest iPhone 16 portfolio, which is now live for pre-orders in India.
As things stand, iPhone 16 and iPhone 16 Plus retain price points of their predecessors, the iPhone 15 and iPhone 15 Plus, despite significant hardware upgrades including an A18 chip, a new chapter for iOS with Apple Intelligence and better photography features. The iPhone 16 prices start at ₹79,900 while iPhone 16 Plus costs ₹89,900 onwards. This has complicated things for Android phone makers who were betting on Apple not upsetting the apple-cart. A first among the jittery moves, sees Samsung announcing a ‘limited period’ price for its Galaxy S24 Ultra, that shaves off ₹20,000. Others would hope to use the cover provided by upcoming sales on Amazon and Flipkart, to gently usher pricing changes.
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A bigger surprise comes in the form of the ‘Pro’ iPhones, powered by an A18 Pro chip, which Apple claims is the fastest chip for smartphones at this time. These phones buck a persistent inflationary trend, and in the same vein, receive a significant price reduction compared with iPhone 15 Pro phones they replace. The iPhone 16 Pro prices start at ₹1,19,900 as against an iPhone 15 Pro which cost ₹1,34,900 onwards. The larger than before iPhone 16 Pro Max now starts at ₹1,44,900 and that’s significantly lower than iPhone 15 Pro Max price tags of ₹1,59,900 onwards.
Abhilash Kumar, Industry Analyst at research firm TechInsights believes “this is a good move and has created a lot of positive sentiments among the people of the country.” Their estimates suggest that iPhone shipments for India increased to 6% of total smartphone shipments to the country in 2023, up from 1% in 2019. “Now that the Pro models are cheaper and Apple is already on double digit annual growth rate ride for past 6 quarters, it is highly likely for Apple to jump up market share to around 8% in Indian smartphone market for 2024,” Kumar tells HT.
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Cyber Media Research (CMR), in their quarterly India Mobile Handset Market Review reports, have indicated an upward trajectory for premium smartphone sales in India. The latest numbers, released in August, suggest that premium smartphone sales (these are phones upwards of ₹25,000 and include Android flagships including the OnePlus 12 series) registered a 29% increase in sales in Q2 2024, compared with the same period a year before. That is the core market demographic Apple would hope to attract.
“Our analysis indicates that Apple’s iPhone 16 Pro models are set to benefit significantly from favourable premiumisation trends in the smartphone market. The more accessible pricing of these models compared to their predecessors is likely to attract a broader consumer base,” Prabhu Ram, who is VP – Industry Research Group (IRG) at Cyber Media Research, tells HT.
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To gauge shipping estimates of the new iPhones, deliveries for which commence September 20, HT tried to pre-order each of the four new devices. The shipping estimates at the time of writing this, are indicated for the week of September 28 to October 5 for the iPhone 16 Pro, between October 5 and October 15 for the iPhone 16 Pro Max, and with September 25 and September 28 as the window of delivery for an iPhone 16 as well as an iPhone 16 Plus. There are some timing variations for colour options, and storage.
While it is expected that India will be an important manufacturing base for local consumption as well as exports for the iPhone 16 and iPhone 16 Plus, there are indications that the company will also manufacture its Pro phones for the first time at its facilities in India via partners Foxconn, Pegatron and the Tata Group. Apple has not commented the matter, and also hasn’t confirmed updated manufacturing plans. If the iPhone 16 Pro phones do get assembled in India (and if that’s true, production would have already started to fill global supply chains), they will be the first generation to do so.
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“We project a notable 30% year-over-year growth in shipments for the iPhone 16 series in its launch quarter, signalling a shift towards newer models as consumers move away from older generations. This growth trajectory positions Apple to potentially capture up to 8% of the highly competitive Indian smartphone market by the end of 2024,” adds CMR’s Ram.
Has Apple reduced the iPhone 16 Pro prices, and retained parity with the iPhone 16 devices, at the cost of hurting their margins? TechInsights’ Kumar believes that’s unlikely. In fact, the opposite may be true. “Apple might have partly increased their margins but at the same time given price reduction to buyers in India,” he says. Kumar believes this will change the trend of older iPhone models driving sales, as witnessed in the previous years, after pricing corrections made them more affordable for buyers.
Assembling in India, for sale in India as well as for exports, is one way to not hurt margins while reducing price tags—import duties are levied on components, instead of the final product.
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