iPhone SE at Rs 39,000 is a clever move from Apple: Analysts

If one goes by the popular view, Apple may appear to have dissapointed Indian fans with its pricing of the all-new iPhone SE. However, analysts disagree as they see the iPhone SE's India pricing as a smart move by Apple.

Over the past few years, with the launch of new iPhone in India the price of iPhone 5S has kept decreasing. This trend has grabbed the interests of domestic consumers who aspire to join the iPhone bandwagon but are otherwise deterred by the high price of new flagships. The iPhone 5S has been a blessing for such consumers — a pocket-friendly route to flaunt an iPhone.

So, killing the demand for iPhone 5S by competitively pricing the new iPhone SE makes little sense till Apple doesn't phase out the older 5S voluntarily.

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"Continuing with the iPhone 5S only for emerging markets like India is not viable for the tech giant. However, Apple will take this opportunity to clear its iPhone 5S inventories by re-importing units from regions where its demand has stalled," said Tarun Pathak, senior analyst, Counterpoint Research.

The end of life for the iPhone 5S is nearing. Apple needs something to cater to this demand and the new iPhone SE is the answer.

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"Users will be able to buy a phone with latest features that is very different from buying an older version at lower price. I think this will appeal more people to buy an Apple phone, including those who otherwise couldn't afford the company's flagship phones," said Anshul Gupta, research director, Gartner.

The high price of Rs 39,000 for the new iPhone SE is surely a deterrent. However, it might actually increase the demand for iPhone 5S and also the iPhone 6 in the country.

"This is a clever stop-gap arrangement by Apple. The company needs a breather for competing in markets like India and wants to space out its offerings. The price of the new iPhone will drop very soon. By Diwali, we can expect a drastic drop in the price of the new SE model. There are two reasons — refurbished iPhones and what happens after iPhone 5S meets its end of life," observed Pathak.

"iPhone SE will help Apple broaden its market segment. This will make market more competitive at that price point as Apple is preparing to take more share," added Gupta.

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Apple is already looking at the refurbished market in the country. This move will allow it to attract the smartphone market in the Rs 20,000 range as well.

"There is a lot of aspirational value involved with iPhones. While people might debate about Android phones being better for the same price, consumers willing to spend on an iPhone think otherwise," said Pathak.

After Apple officially launches its own refurbished offerings in India, it will have its wings spread out. Apart from the the flagships, the Cupertino giant will manage to play in the price-sensitive mid-range market and replace the demand for iPhone 5S with the new iPhone SE after reducing the price in the near future.