Apple is set to unveil today (September 12) the much-awaited iPhone 15 lineup — the successor to iPhone 14, iPhone 14 Plus, iPhone 14 Pro and iPhone 14 Pro Max. This year’s Pro models are said to come with a periscope-style camera lens, titanium chassis and higher price. The Apple iPhone 14 Pro Max, 14 Pro, the vanilla iPhone 14 and iPhone 13 were the top four selling smartphone models, globally, with Samsung’s Galaxy A14 coming in at the fifth spot, in the second quarter (Q2) of 2023, according to market intelligence firm Canalys. The Cupertino, California-headquartered Apple grabbed the highest value share in the global smartphone market with a 44 per cent share in the first half (H1) of this year, indicating that smartphone buyers around the world are increasingly choosing the iPhone over other models.
However, in India, the world’s second-largest smartphone market, Apple comes third in terms of value share, behind Oppo (excluding OnePlus) and Samsung which manufacture flagship Android phones. While the India numbers do not paint a rosy picture, the iPhone maker has increased both its market share and value share in the country in the past few quarters. From 1 per cent share in 2018 to 4 per cent market share, and 5 per cent value share to 18 per cent value share, Apple has been on an upward trajectory. The features and prices of iPhones have increased over the years, but people are still buying more iPhones. Apple iPhones offer a differentiation factor for both the aspirational youth and the elite. Deep e-commerce penetration and easy financing are seemingly among the key reasons why Indians are falling deeper in love with iPhones, with easy financing options being adopted by other top smartphone brands like Samsung and OnePlus.
Indian Consumers Buying More Expensive Phones
The average selling price of a smartphone in India is now $241 (around Rs 19,930), which is a year-on-year (YoY) increase of 13 per cent, as per International Data Corporation (IDC). This buying trend comes amid a global declining smartphone market. Even as disposable income is rising, it is pertinent to note that a sizeable percentage of the population still faces affordability problems and the sales of premium smartphones in India are driven by affordable and easy financing options with handset makers increasingly embracing these options to outpace competition. In fact, the OEMs also tie up with several banks that offer cashback and exchange offers.
“Easy financing options are playing a key role in the premiumisation of the smartphone market. The base variants such as the iPhone 14, iPhone 13 and the upcoming iPhone 15 can reach the masses via the easy financing route. The Pro models, on the other hand, are usually purchased by those who are enthusiasts and eagerly wait for an annual iPhone refresh,” Prachir Singh, senior analyst at Counterpoint Research, told ABP Live.
Agreed Sanyam Chaurasia, analyst at Canalys: “Apple is working with channel partners to provide financing solutions, trade-in programmes and instalment plans to mitigate the initial impact of the price hike. The ‘halo effect’ Apple has built has established it as a luxury brand. The hike in prices of premium models would have a lesser impact on affluent consumers.”
E-Commerce As Growth Catalyst For iPhones
Forty-four per cent of the country’s smartphone sales now happen online. E-commerce channels are increasing the accessibility of premium smartphones to a broader range of people via easy EMI options.
“For consumers in a metro city like Delhi, they can buy from Flipkart, from Amazon, or from resellers and LFRs (such as Croma, Reliance Digital etc.). E-commerce players are playing a crucial role in helping Apple tap into the aspirational buyers in rural parts of the country. E-commerce platforms are reaching far-off places and remote areas where there is demand for iPhones but there may not be a reseller. However, slowly and steadily, the offline channels will also go there,” Singh noted.
Manish Rawat, analyst at Strategy Analytics, said: “High-end smartphones are becoming more widely available, but this also brings problems with debt, e-waste, and economic inequality. Straightforward financing and e-commerce have unquestionably played a crucial part in improving iPhone accessibility throughout India.”
Chaurasia noted: “Consumer disposable income in India is increasing but there is still a large chunk of consumers going for financing options, especially in the premium segment in the offline channel. And with the opening up of a couple of offline Apple stores in Mumbai and Delhi (where the majority of Apple consumers reside) will act as a catalyst for iPhone growth.”