Will iPhone XR Be the Perfect iPhone for India in 2018?

Will iPhone XR Be the Perfect iPhone for India in 2018?

From losing key executives to losing the top spot in the premium smartphone market, 2018 has been a difficult year for Apple in India. But with the “most affordable” new iPhone of the year launching in India and elsewhere on Friday, the Cupertino giant will hope to entice buyers — new and old — in the market.

The new model features an iPhone X-like display notch that includes the TrueDepth camera system, the technology that enables facial recognition feature Face ID. It also has the same A12 Bionic SoC that is powering the more premium iPhone XS Max ₹ 99,300 and iPhone XS ₹ 91,788. Despite the similarities with last year’s iPhone X and the latest and the greatest iPhone models, the iPhone XR ₹ 76,900 starts at Rs. 76,900, making it the most affordable phone that looks like the iPhone X. The price, however, is still higher than even premium Android smartphones that have much better specifications on paper.

Market analysts believe that it won’t be the spec-sheet that will persuade customers to pick the iPhone XR over a top-of-the-line Android smartphone.

“As compared to premium Android smartphones, the iPhone XR will fare poorly on a spec-to-spec comparison, including imaging or display,” observes Rushabh Doshi, Research Manager, Canalys. “However, Apple’s appeal is not in the internals or specs. Its stickiness is high, and users who wish to remain in the ecosystem will buy an iPhone XR.”

Tarun Pathak of Counterpoint Research echoes Doshi’s belief, pointing out that the iPhone XR could be a good upgrade for iPhone users who have skipped the previous-generation iPhone models.

“Hardcore Apple and rich affluent users will be willing to shell that price since it’s a status symbol for them, but then that section of users is small,” Pathak, Associate Director of Counterpoint Research, tells Gadgets 360. “However, we believe that Apple strategy in India should be to sell more iPhones rather than new iPhones. Given the stickiness of the iOS ecosystem, these older iPhone users are likely to upgrade to iPhone only.

While the iPhone XR looks similar to the iPhone X and the iPhone XS models from the front, it packs an LCD display compared to the premium OLED panel on the more expensive iPhone XS and iPhone XS Max. It also has a single camera sensor at the back as well as the colourful back panel that comes in Black, Blue, Coral, White, and Yellow colour options. There is also a PRODUCT (RED) colour variant to attract customers, the first time it’s been available for an iPhone on launch day.

Another first in the history of iPhone is the fact that Apple has added dual-SIM support. This could entice Indian customers who often use a secondary carrier either to distance their personal life from work life or to get cost-effective data benefits on one network and better network coverage on another.

“Display is definitely one of the things on the iPhone XR that pulls a buyer, including Indians,” says Faisal Kawoosa, Founder of research firm TechARC. “Also, the dual-SIM functionality will let users buy it for now and be future ready when the operators could offer services through eSIMs.”

“The iPhone XR is not only focusing on the the design and looks but also on the speed and technologies like the Face ID that all will push its sales in the country,” says Mumbai-based retailer Manish Khatri of Mahesh Telecom fame. “The ease of use, iOS, and brand also plays an important role.”

india premium q32018 counterpoint Apple

Photo Credit: Counterpoint Research

Having said that, IHS Markit’s Senior Analyst for Mobile Handsets Gerrit Schneemann says that Apple still needs to justify its raised price for the entry-level iPhone XR. The most affordable new iPhone of the year is exactly Rs. 9,000 more than the price of the Galaxy Note 9 ₹ 61,900, Samsung’s most expensive offering. “Apple is further pushing into super-premium pricing territory, a segment where no other OEM has been able to compete,” Schneemann explains.

Gagandeep Singh, who works as a store manager at iGlobal, one of Apple’s Authorised Resellers in New Delhi, told Gadgets 360 that at leat five-six customers were enquiring about the successor to the iPhone X on a daily basis, ever since the launch event in Cupertino last month. He, however, considers that with the arrival of the iPhone XR in India, customers could pick it up as compared to the iPhone XS or the iPhone XS Max due to the lower price and similar design aesthetics.

Khatri of Mahesh Telecom, which sells a mix of Android smartphones and different iPhone models, underlines that the people who were initially anticipating the launch of a budget iPhone this year are not likely to opt for the iPhone XR. But the retailer believes that it is Apple’s brand value that will generate the demand for the upcoming model. “A five-year-old iPhone with low memory and fewer features is still selling in the market is a perfect example,” he adds.

Globally, TF Industries analyst Ming-Chi Kuo had predicted right after Apple’s September event that the iPhone XR will capture about 55 to 60 percent of the overall new model shipments this year, with a more recent report pegging it to be a similar success.

Older iPhone models have so far been a major attraction among customers in India. Pathak of Counterpoint says that the previous-generation models capture somewhere between half to two-thirds of the total iPhone sales in the country.

Thanks to regular software updates, Apple offers a similar experience across new and old iPhone models. The company also has a trend of reducing the price of its old models after announcing the new offerings. “As custom duties make the new iPhones costlier, Apple can go for a steep price cut of older generation iPhones to draw sales in India. The iPhone 7 ₹ 28,799 can be the new iPhone 6 ₹ 14,099 for Apple in India,” says Pathak.

According to Counterpoint Research, Apple had one percent share in the overall smartphone market in India in the second quarter of this year, a number that’s expected to reach two percent for the entire year.

There are some key obstacles for Apple in India that could limit the sales of not just the older iPhone models but also the iPhone XR.

“From a design and even hardware perspective, the iPhone XR — which looks a lot similar to the XS series — is an attractive option,” says Kiranjeet Kaur, Senior Research Manager, IDC. “But for Apple to be able to increase its market share in India, there are a lot of challenges ahead including managing its channel strategy and dealing with the higher import duties as these new models are all likely to be imported.”

Kaur also states that the bigger issue for Apple is to manage its share in the $500 (roughly Rs. 36,000) range where Chinese players such as OnePlus have started to take share away from the older iPhones selling at that price point. “The iPhone 7 now and probably the iPhone XR in future (once its price drops) will likely be positioned against these growing threat from the Chinese vendors,” she concludes.