Wednesday, 14 November 2018 09:18

iPhone a blessing to Apple, but could be a curse too

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iPhone a blessing to Apple, but could be a curse too Pixabay

ANALYSIS The ascent of the iPhone over the years has been good news for Apple. But it now is also becoming bad news as the number of new features that can be added are dropping and the company has to resort to pushing prices higher and higher to keep its revenue levels up.

That same policy is also leading to lower sales numbers in the two big markets — China and India — though the ever-increasing prices have ensured Apple's revenue always increases.

In China, the iPhone is losing out to local brands OPPO, Huawei and vivo. One factor that plays into people buying these brands, apart from price, is patriotism.

In the third quarter, iPhone shipments into China were 46.9 million units, marginally higher than the 46.7 million in the third quarter a year prior. But the overall smartphone market shipment trend is downwards.

A drop in carrier subsidies — a factor that keeps iPhone prices much lower in the US than elsewhere — in China for the last few years has also affected sales in the country as it depends on these subsidies to grow sales.

In India, the cheapest iPhone, the XR, is about 77,000 rupees (about US$1060). This is about half the average per capita income, a Reuters report says.

Compare this with the OnePlus 6T which costs about 38,000 rupees, and despite being an Android phone has many of the spiffy features that the new iPhones have.

For Indians, it makes economic sense to buy the OnePlus model. Being thifty is considered a virtue in India.

iPhone prices in India are also affected by the lack of local manufacturing, unlike China. Only two older models are assembled, by Wistron Corporation in Bengaluru.

Additionally, Apple has cut the number of distributors in India from five to two, leading to the loss of top executives as a result.

The revenue that Apple records each year keeps climbing. But there will come a point at which the company will have to start looking at ways to cut price points in India if it wants to keep the revenue at the level it is now.

There is a limit to so-called innovation and features. The next evolution of mobile tech, 5G, has been hyped to the extent where it is sure to be a letdown when it finally arrives. And devices, including the iPhone, can never be better than the tech they deliver.

Where does Apple look next to keep that trillion-dollar market valuation?

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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