Apple has played some strategic pricing with new iPhone, but its trump card might be an older phone

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Updated: September 17, 2019 7:12 AM

Apple will be hoping that the improved cameras on its new phones—the iPhone 11 has two cameras and the iPhone 11 Pro models three lenses—will get at least its dedicated user base to upgrade.

Apple, iPhone, new iPhone, iPhone XR, iPhone 11 Pro, iPhone 11 Pro Max, iPhone XSThe sale of Apple’s older-generation iPhones, meanwhile, grew 12.4%, to 61 million units. (Reuters)

The new iPhones are here. Apple has, this time, chosen to refresh its lineup with upgrades of all the three phones it launched last year. So there is the iPhone 11, which betters the popular iPhone XR, the iPhone 11 Pro to replace the iPhone XS and the iPhone 11 Pro Max, an upgrade on the iPhone XS Max. All three phones are upgrades, so no radical change in design or hardware, except better, and more, cameras as well as a more powerful processor, the A13 Bionic. Apple will be hoping that the improved cameras on its new phones—the iPhone 11 has two cameras and the iPhone 11 Pro models three lenses—will get at least its dedicated user base to upgrade. With what it has launched this time, it might be difficult to get those using newer models to opt for an upgrade, but it might impress those with models up to the iPhone 7.

Research firm Canalys says that from Q4 2018 to Q2 2019, Apple shipped 87 million of its latest iPhones, 26 million less than what the previous generation (iPhone 8, 8 Plus and X) achieved in the same period the year before. The sale of its older-generation iPhones, meanwhile, grew 12.4%, to 61 million units. This will be the first set of numbers Apple will hope to change with the new phones. It has to somehow get its customers to buy more of the newer phones. This is why with the iPhone 11, Apple has brought down its price tag significantly. While the iPhone XR was launched at Rs 76,900, its successor has a starting price of Rs 64,900. It will be hoping that a lot of users in countries like India pick up the new phones instead of opting for older devices. But the fact remains that the iPhone 11 is still an expensive phone for Indians. However, it might have a chance now when users are comparing with other flagships like the Samsung Galaxy S10 or the Note 10. When it comes to specs, all these phones are very similar—with the iPhone offering a lot more in terms of sheer ecosystem advantages.

But, after the launch of its new phones, at least in India, Apple can expect a significant jump in numbers. That is because its most popular phone has become more affordable. Canalys says the iPhone XR, which was introduced in October 2018, shipped 47 million units till June 2019. That is almost the combined numbers of the other two phones launched at the same time—the iPhone XS and iPhone XS Max. That was because the phone was selling around Rs 54,900 after a price cut some months ago and raked in a lot of numbers in India. The iPhone XR can now be purchased for as low as Rs 49,900. Ahead of the holiday season in India, that might be a very strategic new price for Apple, one that helps it take away numbers from OnePlus, which lords over the premium segment now. For the average Indian, the iPhone is still an aspirational phone, and given a choice, he would go for it even if it costs a few thousand rupees more.

But, that’s just India. Apple’s worry for the rest of the world is that, for three years now, it has had the same design and incremental updates. Most of what it has offered now, like the ultra wide lens, has been in the market for a while now. However, its processor is way more superior and so are its efforts at computational photography. But, will that be enough for its captive base of users in countries like the US and Australia to increase their monthly subscription and get a new phone? That, we will have to wait for a few months to see. Of late, these users have been holding on to their phones for longer, thus impacting the numbers for the Cupertino tech firm.

So, even as it could end up with better numbers in India, there will be a worry that its flagship phones won’t do as well as it wants them to. But then Apple might be okay lying low for another year till it prepares for its big 5G plunge in 2020 with radically different iPhones.

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