iPhone SE won’t create the right niche for Apple in India

Faisal Kawoosa

Apple's iPhone SE has been officially launched in the country today. The 32GB variant is available in Rs 39,000. But you have to shell out Rs 49,000 for the 64GB variant.

But, is it really going to be a game-changer for Apple in India as well as a trendsetter for the smartphone market in the country?

Well, firstly, SE does not ‘tectonically’ shift iPhone positioning in India. At Rs 39,000, it will still be counted within the premium smartphone segment in India. So, fundamentally, iPhone still remains a premium segment phone in India and that does not change even with SE launch. In India, smartphones above Rs. 30,000 contribute just a little over 3% to the market.

Secondly, India is a phablet obsessed nation and 46% of the smartphones sold in India have a screen size of 5-inch or more. In the price range, Rs 39,000-Rs 49,000, where it will be competing with the phablets, they contribute over 60% of the smartphones market. In such a scenario, just positioning it as the ‘most powerful 4- inch smartphone’ won’t work alone. After all, size does matter, at least for India.

Another disappointment is that, albeit the phone has been designed for the emerging markets, it is not made available in the first round in one of the largest and the fastest growing emerging markets–India and that is definitely a big turn off.

Unfortunately, with these gaps in SE for the India market, I don’t see it becoming as successful to game change the current circumstances for Apple in India.

In 2015, there was a 53% rise in the premium segment smartphone market in India. Even, if it grabs 100% of the smartphone opportunity around the price range it is in, Apple would only make a market share of 3.5-4%, as against the existing 2.1%. In fact, that would be a good jump for Apple, but seems quite unrealistic to achieve.

Therefore, for India to really become an Apple market, we shall have to wait for a couple of years with the increased uptake of the premium segment in India. For 2016, we expect, Apple missing the 5-million mark even with the SE push.

The author is Lead Analyst- Telecoms and SemiTronics, CMR