Apple Inc's new iPhone SE has first-rate features and a
relatively low price tag, but its prospects in key markets like China
and India may be limited by its diminutive size.
At the product launch
in Cupertino, California on Monday, Apple vice president of iPhone
Product Marketing Greg Joswiak singled out China as a target market,
saying four-inch displays like that on the iPhone SE (Pictures) were still popular
with first-time smartphone buyers.
Chinese buyers tend to start off with a phone with a 4-inch screen, just like the iPhone SE, he argued.
(Also see: iPhone SE Launched: Price, Specifications, and More)
China,
Apple's second-biggest market, and India, one of the fastest-growing
major markets in the world, are both seen as key for Apple, which
expects overall iPhone sales to contract.
The iPhone SE is seen as
particularly important for India, where Anshul Gupta, research director
at Gartner, expects the smartphones market to double to 200 million
units in the next two years.
(Also see: iPhone SE Price in India and Launch Date Revealed)
But in India and China, smartphones
are often the main connection to the digital world, and a big screen is
highly valued, analysts said.
"(In India) the majority of the
low-end, $100 (roughly Rs. 6,800) phones have a five-inch display. The key reason being
smartphone users are becoming more mature are preferring bigger screen
size as many of them don't own a tablet or laptop," said Neil Shah,
research director at Counterpoint Technology Market Research based in
Mumbai.
Only 10 percent of smartphones sold in India at the end of
December had a four-inch screen, according to Counterpoint, and Apple
accounted for only two percent of overall smartphone shipments in India
last year.
And with nearly 70 percent of smartphones selling for
less than $150 (roughly Rs. 10,200) in India, the iPhone SE's roughly $400 (roughly Rs. 27,000) price tag may
still be out of reach for most buyers there.
In China, analysts
warned the iPhone SE could mirror the disappointing outcome of Apple's
iPhone 5c, which was launched as an affordable gadget three years ago.
It was also less technologically advanced than the top phone at the
time.
"The 5c was awful, no one wanted it. Everyone knew that if
you bought it you had no money," said Shanghai-based Shaun Rein, founder
of China Market Research Group.
"Just going cheap doesn't mean it'll do well," he said.
Apple's
second attempt to enter the mid-tier smartphone market, crowded with
Android devices by rivals like Samsung Electronics and
Huawei, is seen as an improvement on the 5C strategy.
The iPhone
SE is up to date with the latest processor, fingerprint scanner and
Apple Pay, and at $399 it costs nearly 40 percent less than the iPhone
6s's $649 (roughly Rs. 44,000) opening price.
© Thomson Reuters 2016
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