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Monthly payment bug bites Apple as iPhone SE sales sag

By Alnoor Peer Mohamed
April 13, 2016 15:22 IST
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iPhone SE. Photograph: Kind courtesy, Apple

A week into the launch, consumers in this country have had a muted response to Apple’s latest iPhone SE, due to its high price and small screen size.

Apple is now wooing companies by offering lease and finance plans to boost sales of the smartphone, a strategy it had adopted to sell iPads to business customers.

“The brief is to make the phone more affordable to the user,” says a vendor for Apple.

“Hopefully, this would help drive more volumes.”

Apple issued full-page advertisements on Tuesday, offering a Rs 999 lease of 24 months for the iPhone SE in India.

While targeted at corporate users to drive bulk sales, the offer is also available for individuals, who need to pay an initial sum and the balance in monthly instalments over two years.

Typically, Indian users change or upgrade smartphones every eight months and Apple hopes the lock-in over two years would help retain users within its system.

“Apple’s share of devices in the enterprise segment  has been steadily growing in India, with double-digit growth over the past few quarters, driven by strong iPad sales,” said Tarun Pathak, senior telecom analyst at Counterpoint Technology Market Research, which tracks Apple  sales in India.

“The new leasing plans aim to attract corporate users (a void created by lack of traction of the BlackBerry and Windows platforms) to increase its share during the coming quarters, when its iPhone sales are likely to undergo seasonality slump.”

Apple has been increasing its focus on India. It had 76 per cent growth in iPhone sales here during the December quarter, while global sales growth was only 0.4 per cent.

It has applied to the government for selling certified used phones, drawing flak from rival smartphone makers.

The iPhone SE, which Apple positioned as its best bet for conquering the emerging markets such as India, has failed to garner sales.

Indian users, for many of whom a smartphone is their primary computing device, prefer larger screens while also expecting higher performance from their devices.

The higher sales of the iPhone6 and 6S in India was attributed to the bigger screens, despite the high price point.

Apple is  also offering lease options on both the iPhone 6 and iPhone 6S models, to both corporate and individual customers in the country.

“The aggressive  leasing plan for the iPhone SE is after the unexpectedly muted reception, compared to any of its new launches in India till date,” said Pathak.

Image: iPhone SE. Photograph: Kind courtesy, Apple

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Alnoor Peer Mohamed in Bengaluru
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