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Apple iPhone entering the market with aggressive pricing strategy


Apple iPhone entering the market with aggressive pricing strategy

The question is why Apple is going to drop the price structure by introducing the 5G iPhone SE? Is it for the mass penetration or people to forget the recent news that Apple iPhones can be compromised and their sensitive data can be stolen through hacking software that doesn’t require the target to click on a link or Is the price of 5G iPhone SE enticing enough to appease customers in the developing markets where Apple's struggle to strengthen its market presence is far from over?


Apple is planning to reveal a new low-cost iPhone SE with 5G, as well as a refreshed iPad Air that adds a new CPU and 5G for cellular-equipped models. Let’s understand the strategy of Apple, for Apple rumours has provided the news, and also divulged that the company is targeting March 8 for a spring event to show off these gadgets. This would have an excellent opportunity to grab to change its appeal to the mid-segment.


An expert says, considering the fact that the developed market is fast adopting 5G tech, leading chipset manufacturers are focusing more on 5G components, and also factoring time and economies of scale, the cost of hardware being used in non-5G iPhone SE may have been reduced to a significant extent. If we take a two-year-old BOM (Bill of material) into consideration, the production cost of iPhone SE is nearly $200. It means a straightforward loss for Apple if it tags iPhone SE at $199.


There are rumours claiming that the price of the new iPhone SE could start from $300 onwards. By selling at this price, Apple still makes a profit of $100. The iPhone has been unable to match the expectations, primarily because of its exorbitant pricing strategy of making the product so expensive.


Another expert says, there is hardly any difference among the Android and iOS phones. After various reports found evidence that iPhones belonging to journalists and human rights lawyers had been infected with malware from NSO Group called Pegasus recently. Apple is known to discontinue its predecessors in a bid to boost the sales of new iPhone models. An iPhone priced at $200 could gain traction in regions such as Africa, South America, and most importantly India that are currently dominated by Android smartphones.


The move will add millions of price-sensitive customers who are still maintaining distance despite being highly impressed with the features of the iPhone to the Apple ecosystem. Besides, it will make an entry-level iPhone extremely profitable for Apple over the long haul. But, to date, Apple has stayed away from this approach for reasons best known to the leadership team of the company only. The decision to launch the $199 iPhone SE will also provide Apple with an easy solution to its iPod touch dilemma.



However, the move, however, will throw up a challenge for Apple to revisit its ‘uncompromised’ term. It is the game of volume that comes to compensate for Apple's loss or profit. Finally, launching a $199 iPhone will open a huge opportunity for the growth in developing markets which are huge by the numbers of smartphone users and it’ll give a strong competition to Samsung and Chinese brands, such as Xiaomi, Vivo, and Oppo, which has been one of the biggest success stories in the recent times.

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