Apple unveiled two new versions of its flagship iPhone on Tuesday, including a lower-cost smartphone aimed at price-conscious customers in fast growing overseas markets.
Six years after it entered the smartphone market, Apple is shifting strategies to appeal to a more fragmented audience and threats from low-cost competitors. With the introduction of the cheaper phone, the iPhone 5C, Apple is targeting a younger, less-affluent audience. It is also offering a traditional upgrade, the high-end iPhone 5S, for its core audience of gadget lovers.
The entire smartphone industry is grasping at ways to lure buyers for their most expensive — and most profitable — models as U.S. and Western European markets become saturated with established smartphone owners.
"It's not a growth market as it was five years ago," said Gartner analyst Carolina Milanesi.
In key markets, Apple, which traditionally releases one premium smartphone model per year, has been losing market share to low-cost smartphone makers such as ZTE, Lenovo and Xiaomi. Estimates from Gartner showed that, in the most recent quarter, Samsung picked up 31.7 percent of the global market compared with Apple's 14.2 percent.
The iPhone 5C will come in several new colors, including yellow, blue and pink, which should appeal to younger buyers. It will start at $99 on a two-year contract — the same price point that Apple used to offer for its older phones.
But Apple's downmarket strategy comes with risks. By offering a lower-cost version of the iPhone, Apple could cheapen its brand or cannibalize demand for its more expensive model, analysts have said.
In this case, the iPhone 5C may not be cheap enough to attract true bargain hunters. In many overseas markets, wireless providers do not subsidize the cost of the phone, which will retail at $549.
Source: Astro Awani
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