On 13th September 2018, Apple unveiled its new iPhone series- iPhone XS, iPhone XR and iPhone XS Max. Though the future if iPhone XS may seem a little uncertain, with no significant changes in its features as compared to iPhone X, but that is not the case.
The iPhone XS Max costs 1099 $, the price has soared a little higher and this may be in favour of the company. It is yet difficult to talk about its certainty due to the large screen size of iPhone XS Max. The big screen size makes it look more like a tablet.
But Apple understands the very basic concept that in the present world smartphones are the most essential part of everyone’s life and so people do not think much before spending on a good phone and there is no doubt that iPhone XS will be the new eye candy in the market. Even with a higher price.
The iPhone XS Max with 64GB storage capacity costs 1099$, which is 350$ more than the starting price of iPhone 6 at 749$, the top end offering four years ago. On the other hand, iPhone XR is still affordable. Apple has been raising the price of its phones for years. The success of iPhone X which was launched at a price of 999$ proved that they were doing it right. iPhone X took over the market despite all the criticism and this has given the necessary boost to Apple to raise the prices even higher this year.
Ben Wood who is the chief of research at CCS insight also believes the same and agrees that people are willing to spend a huge part of their earnings for a quality smartphone because smartphones are like the oxygen in our lives today. We cannot survive without it. And that is what Apple is doing. It is giving people the quality and style they require at whatever price they feel suitable because they have understood the fact that people buy it, even at a higher. Smartphones are no more a liability but a need.
If you observe the trends in the past 12 months, you will observe that raising prices every year was a financial strategy. With the price of iPhone XR considerably lower than iPhone XS and iPhone XS Max, it has strategized to offer the notion of affordability to its users. Those who cannot afford iPhone XS or iPhone XS Max can afford this one, at a fair price with almost all the features. It costs just a third of iPhone XS.
The new series is launched to capture the market of those that look for upgrades and do not care about money. It won’t be surprising if many iPhone 6 and 7 series users upgrade to the XS series and end up with a tablet looking phone with a screen size of 6.1 inches.
This series won’t be very successful in India yet Apple will continue to rule as the premium brand in the smartphone business. In India, it is more likely that Apple will focus on selling lower end phone like iPhone 6 and 7 to the brand conscious people. Indian users still have their hearts on the iPhone 7 series.
To make it easier for its users to buy an iPhone, Apple will offer to zero down payment option with EMI’s lasting up to 24 months. This may be a good strategy to raise the sales. These offers will be available for all Apple phones and so there are chances that people will now rush to buy the older series of iPhones. This would be like a chance to become an Apple user no matter what series you buy.
Apple sees itself as a premium brand and we believe the same. It is really important for Apple that it stays at this level for a very long time. The average selling price of Apple is well over 700$ now and there is no such brand that has that kind of brand equity in the market.
But we must also understand the higher the price, the longer the user sticks to the same phone. So the refresh cycles will always be longer. But Apple has found a solution to this too by increasing the lifetime value from the customer.
What adds to the success of Apple is the selling of its other products like Apple watch and getting money from Apple Music. It seems like the Apple market is forever expanding.
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