Apple has stopped the sale of the older iPhone 4S and iPhone 5C in India in a move that is aimed at bettering Cupertino’s average selling prices (ASP) as well as profits.
India has been targeted by Apple as a major market for its growth in sales thanks to the extraordinary growth the economy presents. The country has a population of about one-fifth of the world and it considered to be among the fastest-growing economies in the world. Apple wants to be here and be part of this growth. CEO Tim Cook and his team believe that dropping the cheaper iPhone 4S and 5C could help spur the sales of iPhone 5S and the newer iPhone 6 and 6S.
According to a report from the Economic Times, the decision by Apple to drop these two phones was arrived at after the company realized that its profitability and ASP in the country were “under strain.”
Apple wants to exit the sub $300 category
Apple iPhone 4S has been exchanging hands in India for about $175 or Rs 12,000. On the other hand, the iPhone 5C was available for only $292, which is equivalent to Rs 20,000. With the decision to discontinue the selling of these two phones in the country, it is clear that Apple is no longer featuring in the sub $300 category of smartphones.
At the moment, the only available, cheaper option for the iPhone is the 5S. This phone is currently valued at $350, an equivalent of Rs 24,000. Last year, this device’s price was drastically reduced by the company in order to accelerate its sales in the country. The company’s latest move seems to be aimed at fostering the sales of this iPhone 5S in India, with the end result being better average selling prices as well as increased profits.
Apple’s iPhone 5SE coming to India
As mentioned earlier, Apple has set its eyes on India. Now that it has cleaned its closet, it seems the company is making it ready for a refreshed iPhone 5SE, which reports claim will launch this coming March. The phone is expected to be priced at around the same price as the current iPhone 5S, something that could mean the latter might see the same action as to what happened to iPhone 4S and 5C. However, this might take some time.
According to Apple CEO, people are willing to spend more on devices that are better and capable. This includes even people in developing markets such as India and China. As long as the device is equipped with the latest technology, specs and features, Apple believes that consumers will buy. As a result, the company will see higher profit margins and a better ASP.
Apple recently revealed that India’s growth in iPhone usage stood at 76% while revenue grew 38% in Q1 2016. It is no wonder the iPhone maker has heightened its focus in the region.