Apple launched the new iPhone 5, introduced several hardware features like a new connector on the iPhone and showcased an updated mobile operating system (iOS 6).
Although no official word on its India launch has been shared, analysts expect Apple to tie-up with leading mobile operators besides Aircel and Airtel, its existing operator partners in India that were roped in for iPhone 3GS, 4 and 4S devices. Though Aircel and Airtel have not exactly seen a runaway success in selling Apple devices, analysts believe that Apple — which commands just about 3 per cent share in the smartphone market — could seek similar co-marketing partnerships with the top four mobile operators in India where data plans are customised for the iPhone users and handset cost subsidised (with locked data bundles) to make the smartphone affordable.
Abhishek Chauhan, senior consultant (ICT Practice), Frost & Sullivan, South Asia & Middle East, says, “3G is still in its early days, but if the operator channel can price the data plan affordably and improve the experience of 3G networks, it could push sales of high-end devices like the Apple iPhone.” Today, nearly 60 per cent of device sales (specially the high-end ones like Apple iPhone or Samsung Galaxy, etc) happen at company’s retail stores or at large format retail stores. Operator channel sales for premium smartphones are usually single digit figures, estimate analysts. According to sources Business Standard spoke to, the top four telecom operators have been in talks with Apple to introduce customised data plans and devices in India.
Research outfit Convergence Catalyst believes smartphones priced above Rs 24,000 (includes likes of Apple, Samsung Galaxy S range, HTC One X, etc) will make up to 6.5 per cent of the total Indian smartphone market in 2012.
At the end of 2011, installed base of smartphones in India was estimated at 24 million units, and smartphone sales are set to grow over 77 per cent in India in 2012, which makes the country a very lucrative market for vendors like Apple, Nokia, Samsung, Sony Ericsson, HTC among others.
“No one can deny that Apple is the only smartphone vendor whose focus transcends beyond the hardware feature set to creating an overall ecosystem. By creating a formidable ecosystem with an abundance of content, services and applications, Apple has won over millions of end users, who just have to have the next Apple product.
However, other vendors are also building their own ecosystem. Proliferation of android apps and emergence of Google Play app storefront threaten to slow down the growth of Apple,” notes an analyst for Frost & Sullivan, South Asia & Middle East.
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Meanwhile, manager-in-charge of Apple products at Reliance Digital, claims, “All Apple products ride on built-up hype and excitement. Ahead of every product launch we get queries from the users. The launch of iPhone 5 is no different. Already people have started checking when the product would be available at the stores and at what prices." Enquiries made by Business Standard at various large format retailers revealed that buyers are reportedly holding their smartphone purchases — mostly those who are looking at premium end models that cost Rs 35,000 and above — in anticipation of a new device from Apple and price drops for older iPhone and competition’s models.
Smartphones are expected to form 12 per cent to 14 per cent of total mobile handset sales in 2012. Strategy Analytics’ estimates that India will soon be the world’s third most valuable market for handset sales (by revenue) with wholesale (trade) revenues of mobile phones set to increase over 60 per cent in India between 2012 and 2017.
Globally, Samsung and Apple have more than doubled their combined market share over the past two years, which has created more distance between the companies and the competition. “Samsung and Apple have quickly become the global smartphone heavyweights though both employ somewhat different approaches to the market,” said Kevin Restivo, senior research analyst with IDC's Worldwide Quarterly Mobile Phone Tracker. “Samsung employs a ‘shotgun’ strategy wherein many models are created that cover a wide range of market segments. Apple, in contrast, offers a small number of high-profile models. While both companies have expanded their geographic presence in pursuit of market share, the two companies will inevitably come into greater conflict as both try to generate additional gains.”
Heavy demand in grey market
Prepare to pay a premium if you want to buy the new iPhone ahead of its formal launch in India. Two mobile handset dealers from New Delhi’s Khan market claimed they expected the ‘new iPhone’ to retail at more than 50 per cent of its launch price in the US.
According to experts, the price of the new iPhone could be up to Rs 50,000 at the time of launch.
The new iPhone is billed to reach Indian markets within 30-40 days after its US release.
“The premium charge would depend on a lot many factors, like when the product would be officially launched in India; the official MRP and customer hype. But from our previous experience, we have seen people willing to pay even double the official price to get the product within a week of its US launch,” said a vendor from Karol Bagh.
According to a sales executive at iWorld, a Delhi-based firm that retails Apple products said, “It could take up to about two months for a new Apple product to be available in India officially.” Currently, retail prices of the iPhone 4 start at about Rs 29,000, while the iPhone 3GS costs about Rs 16,000 (as offered on e-commerce stores). Prices of the iPhone 4S start at about Rs 43,000.
In 2007-2008 period, around 1,25,000 iPhones had made it to the Indian markets through the grey channel, as after its launch in 2007 it was not immediately available in India. “India is a thriving market for smuggled Apple products. Realising this, the company has been trying to cut the time it takes to unveil its new gadgets in India.
Even a one month gap between the official release of the device in the US and in India can persuade iPhone fans to pay as much as double the price for a phone smuggled from abroad," Jayanth Kolla, co-founder of Convergence Catalyst said.