Apple hardens stand on encryptions, softens on price

The Apple invites for the March 21 event had the tagline “Let us Loop you in”. In all probability, it alluded to the venue of the event — 1, Infinite Loop — the location of Apple’s headquarters in Cupertino. But was Apple also, in a way, telling you they were in a loop of recurring themes?

The iPhone SE, without doubt the most significant of the announcements during the day, was a throwback, bringing back the once popular 4-inch form factor. Apple did that also with the new iPad Pro 9.7-inch, the size in which the Apple tablet was launched in and sold 200 million devices of.

Even as CEO Tim Cook started the event by announcing that he was ready for a long fight over encryption of Apple devices with the US security agencies, the event suggested that they were able to give in on some things, like price for instance.

In fact, the iPhone SE is the cheapest launch price for an Apple smartphone at $399. The story, for a while, got even better for the Indian audience as Apple initially announced that the 16GB version of this phone would be priced in India at a very aggressive Rs 30,000. However, the price was later corrected to a more Apple-like to Rs 39,000.

Analysts still see this as a good price. Rushabh Doshi of research firm Canalys told IndianExpress.com, that the phone addresses untapped potential in the 4-inch premium segment market in many countries. “The pricing, albeit lesser than the larger iPhones will appeal to the price-conscious, who are yet looking to associate themselves with a premium brand. While the iPhone SE is the most affordable iPhone at launch, its pricing strategy in markets outside the US will be important for the SE to be a popular choice for first time iPhone users,” he said.

While, Doshi said, the price in India has almost a 50% premium over the US pricing, “users will wait for subsequent price cuts before laying their hands on an SE, waiting for it to become more affordable”. He said that given the healthy ‘resale’ market status that Apple enjoys in price-conscious markets like India, the SE will have to compete against a resold iPhone 6 and 6S. The phone, which uses a chassis very similar to the iPhone 5s, has specs and components of the newer iPhone 6s, including the A9 chipset, 12MP camera and fingerprint scanner.

Tim Bajarin, president of US-based Creative Strategies, Inc, is positive about the new phone as it has “the same technology that is in Apple’s newest iPhones and is the lowest cost premium phone in their line”. “There is pent up demand for a 4-inch phone and one with this level of features will be a big hit and drive many who have been on the sidelines to finally upgrade if they resisted the large iPhone designs,” he added.

Bajarin said the new iPhone is “especially focused on their expanding into emerging markets and is the first iPhone they will use to start growing their market share in India”.

While agreeing that the price is still a bit high for some markets, he said, Apple is an aspirational brand and even in emerging markets there is interest in iPhones. “I see India as Apple’s next major market and over the next three years they will put a lot of time, money and energy into expanding their market share in India. And, they will eventually drive these prices down and make them even more affordable for all emerging markets and use it to grow Apple overall iPhone market share and ecosystem.”

The other significant announcement was the price cut on the Apple Watch. Despite being the most popular single smartwatch model in the world now, it hasn’t seen significant uptake in countries like India. With the new price, this wearable could find more adoption in emerging markets.

(Travel for this report was sponsored by Apple)