EMI bug bites Apple as iPhone SE sales flop in India

Apple is now wooing corporates by offering them lease and financing plans to boost sales

A week into the launch of the latest iPhone SE, Indian consumers have shown muted response to the Apple’s affordable phone due to its high price point and small screen size. 

T o buck the trend, Apple now is wooing corporates by offering them lease and financing plans to boost sales of the smartphone, mirroring a strategy it adopted to sell iPads to business customers in the country.

“The brief is to make the phone more affordable to the user,” says a vendor for Apple in India. “Hopefully, this would help drive more volumes”.

Apple came out with full page advertisements on Tuesday offering lease plans of Rs 999 for 24 months for the iPhone SE in India. It is targeted at corporate users to drive bulk sales who need to pay an initial sum with a balance in monthly instalments spread over two years. 

Typically, Indian users change or upgrade smartphones every eight months and Apple hopes the lock-in over two years would help them retain users within its ecosystem.

“Apple’s share of devices in enterprise segment  has been steadily growing in India with double digit growth over last few quarters driven by its strong iPad sales,” said Tarun Pathak, senior Telecom Analyst at Counterpoint Technology Market Research, a researcher that tracks Apple  sales in India. “With new leasing plans it aims to attract corporate users, (a void created by lack of traction by  blackberry and windows platform) to increase its share during the upcoming quarters when its iPhone sales are likely to undergo seasonality slump.”

The iPhone SE, which Apple positioned as its best bet for conquering emerging markets such as India has failed to garner sales due to its high price and small screen sizes. Indian users, for many of whom a smartphone is their primary computing device, prefer larger screens while expecting the higher performance from their devices. Nine out of 10  devices sold in India run on Android, the mobile operating system of Google and at price points of around Rs 10,000.

“We have seen similar exciting offers on iPhone 6, 6s, iPad but it hasn’t helped to drive sales in millions. India is a market where more than $500 smartphone contributes only 2% of sales, moreover buyers are also price conscious. People look at overall cost not just monthly cost,” said Anshul Gupta, Director at technology researcher Gartner Inc.

Apple has been increasing its focus on India, witnessing a 76 per cent growth in iPhone sales in the country during the October-December quarter, while globally sales growth slowed to just 0.4 per cent. It has applied with the government to sell certified used phones in India, a move that has drawn a lot of flak from rival smartphone makers. 

The higher sales of iPhone 6 and 6S in India was attributed to the bigger screens despite the high price point. Apple is also offering lease options on both iPhone 6 and iPhone 6S models to corporate customers in the country
 

“Apart from this the aggressive  leasing plan for iPhone SE is another step by Cupertino vendor to find a market for “iPhoneSE” which is getting a unexpected muted reception compared to any of its new launches in India till date,” said Pathak of Counterpoint.