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£130/$199 iPhone coming this September will win $135b emerging market, analyst

Karen Haslam | Feb. 21, 2013
Munster is convinced that Apple will launch a low-cost iPhone priced at around $199 (£130 ex VAT) in the September quarter

According to Huberty, Apple could gain a 20% share of China's smartphone market if a $330 (£215) iPhone mini was launched there, along with a China Mobile deal.

Also significant, nearly 40 percent of all 3G smartphones shipped in China are TD-SCDMA, and Apple's iPhone doesn't support this protocol. This is likely one reason why Apple and China Mobile are yet to sign an agreement.

How India might prove that cheaper isn't the only solution

As we've mentioned before, India is also a significant emerging market for Apple to target with a low-cost iPhone. It may be the case that in the US China is getting more attention in the US, while here in the UK the government is working closely with India, pushing that country to the top of the agenda here.

It certainly appeared, from Apple CEO Tim Cook's recent comments that India was farther down the list of priorities than China. "I love India, but I believe that Apple has some higher potential in the intermediate term in some other countries," he said. "That doesn't mean that we're not putting emphasis in India - we are. We have a business there; that business is growing, but the multilayer distribution there really adds to the cost of getting products to market. So we're going to continue putting some energies there, but from my own perspective, in the intermediate term there will be larger opportunities outside of there."

Either way, it appears that Apple is not ignoring the country.

There is a suggestion that in contrary to the idea that Apple needs to produce a cheaper iPhone to be successful in that country, it may be able to win market share with an installments-based model.

Apple had been selling iPhones in India on the open market, rather than through carriers that subsidize them and in so doing lower their selling price, but it is now working with Indian distributors to offer installment-based payment plans.

CEO of TheMobileStore Himanshu Chakrawarti told Economic Times: "Apple understands that installments-based payment is an effective tool for bridging the gap between value and affordability. We started the EMI scheme with Apple early this year and witnessed a three-fold increase in sales."

It appears that Apple has also increased its focus on India. Jayanth Kolla, founder & partner at Convergence Catalyst, told Economic Times: "Apple is doing what it did in China three or four years ago. They studied the market, learned consumer needs and suddenly went aggressive. From having about 30 people here six months ago, Apple India is now about 150-people strong."

It appears to have been a success: IDC India analyst Manasi Yadav told Economic Times that iPhone sales in India have increased by 3-4 times in the past three months. Part of the success is due to an open distribution model, he suggested, with Apple signing up distributors Redington and Ingram Micro.


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