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Will Apple's iPhone 5c help it conquer the emerging markets?

Harry Ashcroft discusses if the release of the iPhone 5C and 5S spell trouble for the Californian tech giant?

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Last week Apple released not one, but two new smartphones. The first, the iPhone 5s, offered little new in terms of technological change, keeping in line with Apple's format of previous iPhone release.

The 5c, however, does mark a significant change in Apple marketing and strategy; the basis of Apples mass-market appeal throughout its existence been has been about its very elite image. The MacBook is the market leader in laptop sales, whilst the iPod and iPad also both dominate their markets in terms of financial success, outselling significantly cheaper versions offered by companies like Amazon, Microsoft, HTC and sometimes even Korean giant Samsung.

Credit: Globovision
Credit: Globovision


Why, might we ask? Because the elegant design of Apple's products has elevated them above the rest of the market, offering something that irrationally drives up demand (even if Apple do go on to sell their products above the market rate). Here we see the ownership of an exclusive product as the driver of the companies success, regardless of ones own financial situation.

In the past, to have an iPhone was to have had the best smartphone money could buy. However the introduction of the 5c changes this, - it is a cheaper plastic version of its predecessor, and by default cannot have the same image of exclusivity. Apple has good reason for this strategy, as mobile phone ownership in the BRIC nations (Brazil, Russia, India and China), alongside the emerging markets in Asia is rising like never before. In these countries, it is not Apple, but companies like Huawei, HTC and Samsung that are currently dominating.

Apple's iPhone 5c has little to do with us here in the West, therefore. In China, Apple holds less than nine per cent of the mobile phone market share, compared to a figure of 40 per cent in the US. Since 2008, the size of Chinas economy has ballooned by 50 per cent, in contrast to the two and ten per cent across the EU and North America respectively, creating a newly emerging middle class with a desire for new technology.

Such a small market share indicates a real problem for Apple; yes, their exclusive image falls on deaf ears in the developing economies, but is it worth abandoning the image that has been so successful in the developed world? The combined populations of the UK, EU, Canada, Australia and the US comes to roughly 1.2 billion, and these are 1.2 billion consumers with a significantly larger GDP per capita than those of the developed world, and a taste for what Apple already delivers.

The simultaneous release of a premium product alongside a cheaper version implies Apple is hedging its bets, trying to maintain dominance in the West whilst reducing the damage it sees by increased phone ownership in the East.

The loss of its total monopoly on technology seems to have dented its own outward look and in some ways its market confidence. Recent history tells us this is not a good approach to the entrepreneurial world of handheld technology.

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5 Comment

Gaurav Bidasaria Posted on Monday 22 Jul 2019

O2 has released its carrier plans for the new iPhone 5s. You can find them below. It is to be noted that the prices are so expensive that it would be cheaper to buy an unlocked iphone 5s and get the plans separately.

http://www.takeaclick.com/2013/09/17/o2-announces-iphone-5s-prices-expensive/1305/

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Bryan Posted on Monday 22 Jul 2019

"Their exclusive image falls on deaf ears in the developing economies."

No it doesn't. Apple's exclusive image is actually enhanced in developing economies due to less people having Iphones, and Iphones being more expensive (relative to average wages). The less people own a product, the more exclusive it is.

Apple does not hold 40% of the US mobile phone market, however it's market share of the smartphone market is 40%. An important difference.

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Thomas Ron Posted on Monday 22 Jul 2019

Pickled walnuts constitute part of a balanced diet.

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Thomas Ron Posted on Monday 22 Jul 2019

Haha lick the lizard of life.

Reply

Rhino Posted on Monday 22 Jul 2019

Emerging markets tend to be about one thing: price. The 5c isn't particularly cheap.

Based on that alone I'd be skeptical about it doing much for Apple in emerging markets.

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