Friday, October 21, 2016

Apple prevents iPhone 4s & 5c revenue in India because it increases ASP with iPhone 5s

As Apple continues to look to India as a market for extraordinary growth, it has now stopped selling the iPhone 4s and iPhone 5c in the country in an effort to raise the average selling prices of its devices and increase profits. The Economic Times reports that Apple made the decision due to its profitability and average selling price being “under strain” in India.

Apple had been selling the iPhone 4s in India for as little as Rs 12,000 ($175 USD), while the iPhone 5c had been available for Rs 20,000 ($292 USD). Now that the company has stopped selling those devices, however, the iPhone 5s is the most affordable device it sells in India at Rs 24,000. Apple dramatically lowered the price of the iPhone 5s in India to accelerate growth last December. This means that Apple no longer sells any smartphones in sub Rs 20,000 market, which is seeing the fastest growth in India. Over time, we should expect to see the iPhone 5se launch in India at around the price of the iPhone 5s, though.

During a company-wide town hall earlier this year, Apple CEO Tim Cook explained that the company believes people will pay more for a better and more capable smartphone, even in countries like India. Essentially, Cook said that Apple’s research proves that there’s no reason to release lower-cost, less feature-packed iPhones in countries like India and China when consumers are willing to pay more to get the latest technology, thus giving Apple higher profit margins and a higher average selling price.

India has been a huge area of interest for Apple over the past year. The company is moving towards opening its own retail stores in the country and is planning a new development center there, as well. During the company’s Q1 2016 earnings call last month, Cook noted that iPhone sales grew 76 percent and revenue grew 38 percent in India during the quarter, signaling the reasoning for Apple’s heightened focus on the country.

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