After all the success in Japan, the Apple Inc. iPhone 5C is going to have a little bit of a problem in emerging markets such as India, China, Brazil and Russia since the model is too highly-priced. The new model was supposed to be a step away from the high-end considering its price. Despite the practicality of using Apple products, ease of use and uninterrupted answers to questions such as how to send fax from iphone, many still do not consider the price of the phone acceptable. According to a statement released today by research firm Gartner, it appears that the previous iPhone is going to be the volume driver.
Watch this review to learn what the iPhone 5C and the 5S do and don’t have in common:
Why so expensive?
While this doesn’t seem to be a big deal in first-world markets like the United States or Europe, Apple Inc. is in trouble in other parts of the world. Most emerging-market carriers don’t offer subsidies on handsets and this will probably prevent customers from buying the new 5C model because the full price has to be paid upfront. The price gap between the new version of the iPhone and the 4S suggests that the newest version is not going to help drive further penetration. Apparently, Apple is having a hard time getting its products to be truly global.
Russia’s smartphone problem
In Russia, the price of the iPhone 5C is a lot slower than the 5S, but it still is pretty close to the average monthly income in the country. According to analyst Simon Baker of IDC in Moscow, Apple Inc. is clearly losing the race to Samsung Electronics and it’s because of its prices. Russia’s smartphone market is not so welcoming: about 8 percent of the population has one and these devices are only affordable for the very wealthy.
China’s case
On the other hand, in China, Apple Inc. has secured a license to run on China Mobile Ltd. (ADR), China Unicom (Hong Kong) Limited (ADR), and China Telecom Corporation Limited (ADR), but these last two companies don’t offer subsidies. The Chinese don’t find Apple so hot either: the Cupertino-based company is losing market share to companies like Lenovo, Samsung, ZTE, and others. However, the gold-colored iPhone 5S seems to be a huge hit, as some consumers are prepared to spend a month’s wages on one.
Trade-in: the solution?
Apple Inc. has started an in-store trade-in program that allows its customers to trade their old iPhone versions and get credit on their next purchases. If this program is combined with the carrier’s subsidy, the price of the phone lowers considerably. Unfortunately, this is just not going to happen overseas.
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