At 39k, new iPhone’s price may be ‘too high

Apple’s new iPhone may not make much of a business case in India and could prove to be a damper. At Rs 39,000 on wards, iPhone SE will cost more than double the prevailing price of 5S (the cheapest Apple smartphone available) and will be on a par with the flagship 6S devices.
Though the new iPhone was expected to be a cheaper version of the world’s most-aspirational smartphone, Apple says that the iPhone SE packs in the latest technology but in a smaller 4-inch display, a factor liked by a section of people, especially in the high-volume Chinese market.
While Apple announced a price tag of $399 in the US, which comes at roughly Rs 27,000 when converted to Indian currency, the company has decided to charge a hefty 47% premium, after factoring in import duty and other logistical costs. Manufacturing in India is roughly 12% cheaper against importing the devices in line with the government’s ‘Make in India’ thrust. Close competitor Samsung must be heaving a sigh of relief as the high pricing is likely to keep a check on any runaway demand.
Pre-orders for the new device will begin from March 29, and deliveries will begin from April 8, Apple said.
5S has a price tag of little lower than Rs 18,000 on most e-tailing platforms for a 16GB (4-inch) version, considered highly attractive for the product. On the other hand, a 16GB version of the bigger screen-size (4.7-inch) iPhone 6 costs about Rs 31,000, while the latest iPhone 6S comes for around Rs 40,500.
Apple vice-president Greg Joswiak said the company sold over 30 million 4-inch devices last year, prompting it to develop a new device of that size but with latest processors and features.
“Some people simply love smaller phones,” Joswiak said at an event at Cupertino in California, which was also attended by CEO Tim Cook. He gave the example of China where a large number of buyers opted for a smaller screen size, while switching from an Android device or when buying their first iPhone.
However, analysts found the price “too high” for Indian customers and added that a smaller screen size may not cut much ice. “This is not the favoured size in India. If you look at sales in December, the 4-inch size accounted for only 7% of smartphone sales,” said Tarun Pathak, an analyst with CounterPoint Research.
“Importantly, most of the small screen sales have been in the range of Rs 6,000, and thus Apple may not find many buyers at the SE’s price level.”
The iPhone SE comes in four stainless-steel finishes, and incorporates the faster A9 processor that also runs the larger iPhone 6S handsets. Joswiak said the processing power of the new device is double that of 5S, while graphic performance is three times faster.
The new device also offers latest features such as live pictures, while giving 50% more LTE (4G) speed.