Apple has always been known for attracting customers with impressive and latest technology, and stylish and trendy devices. The latest device to have hit the market the iPhone5 has been creating a mass hysteria among Apple loyalists and smartphone users alike.
Fringe benefit for iPhone 4 through the iPhone5 launch
A big fringe benefit of the newest launch is that the older versions – iPhone4 and iPhone4s will now retail at a much lower price tag than its current rates. The device which is propelling its growth in price sensitive markets such India and other Asian geographies is not a latest one - the iPhone5, but one that came out 3 years ago. The iPhone4, which was originally released by Apple in 2010 is pushing Apple’s growth in such markets.
It has been reported that Apple has been making a major part of its profits through its older device versions. Apple’s earning results were released on 23rd July revealed quite a few surprises for market experts. The iPhone’s sales in Q3 registered an increase of 20% as compared to the same period last year, and an increase of 18% from what market experts were projecting.
iPhone’s increase in sales in price sensitive markets like India is evident from the fact that “India was up by 400%”, as compared to the US and Japan markets which grew by 51% and 66% respectively. This is driven by the company’s new pricing strategy which includes allowing customers to exchange any of their old smartphones to avail a cash discount of at least INR 7000. Apple is also planning on devising new strategies for iPhone4 in China where the company’s sales recently slowed down.
New sales strategy by Apple?
The iPhone4 gained high sales due to a new and aggressive price strategy by Apple. The company is targeting its older models, primarily the iPhone4 and iPhone4s in price sensitive markets, and in segments where the number of users who have never purchased a smart phone before is high. iPhone4 stands as the least expensive iPhone till date and is even available for free in the US with a two year carrier contract.
With a sleek design, the iPhone4 gives an appealing look and anyone would love to sport it, just like they would love any other Apple device. But market experts say that besides the design and technicality of the iPhone, it is the pricing strategy and the discounts offered by Apple on its older models that is driving the growth in the sales of the company. The price cuts in the older models of Apple including the iPhone4 are largely driven by decreasing production costs, falling component costs and a higher production operational efficiencies.
Alternate sales strategy
Apple also seems to be planning for a low cost model from the very start. This is evident from the increasing sales of older models which are sold at lower prices. If the company focuses on low cost models with margins in view from the very beginning, it could present a trademark Apple device at a much lower cost for people who are looking for their first smartphone at a lower price. Such a move by Apple could also enable it to compete in a better manner with Android powered devices which are provided at a comparatively much lower cost by different companies and fast eating into smartphone subscriber base.
There are no confirmed reports of a low cost Apple device as yet, but evidence strongly suggests that we could witness such a device by the end of this year. If the iPhone4 and other older phones continue their rise in the coming months, a low cost Apple engineered device will not be far away.
The downside of this new strategy?
A possible downside of the pricing strategy for older versions could mean increased problems for mobile app development companies who are already dealing with fragmentation problems after the introduction of the iPhone5. Each mobile app development company, in such a case, would have to develop apps that would suit not only the latest iPhone, but also work well on the older models as well, now that Apple is continuing to push shipments of older versions too.
Author Bio
I'm Maria Lynette, author of this article. I'm a passionate blogger interested in writing articles related to mobile aspects especially on mobile apps development companies.Follow me on Google+, Twitter,
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