The Low Cost iPhone

A very interesting article on Bloomberg today by Bianca Vázquez Toness.

“Indians Flaunt 4-Year-Old IPhones as Apple Builds Appeal”

“You flaunt an iPhone, but you don’t flaunt an Android,” said Punit Mathur, a 42-year-old vice president of a digital media company who switched to a new iPhone 4s from a Nexus 4. An iPhone 5s that would cost 53,500 rupees ($874) is too expensive, “but the 4s is still an upgrade,” he said.

Gives you a great idea of the strength of the Apple brand. It’s also amazing that moving from a Nexus 4 to an iPhone 4s is an “upgrade”.

The article also describes Apple’s strategy in India which is composed of a) using old or refurbished phones to get customers into their ecosystem and b) installment plans which break down the cost of an iPhone into 24 payments.

The important thing is that Apples 2Q2014 showed strong sales in Brazil, Russia, India and China. This proved to the world that Apple actually has a working strategy for the more cost sensitive markets. If Apple is to introduce a low-cost iPhone this year, the strategic reasoning will undoubtedly be rooted in the success they’ve already having.

As for the iPhone 4s being an upgrade for the Nexus 4, consider the following;

スクリーンショット 2014 08 08 20 52 07

I think that the key to understanding Apple’s low-cost iPhone strategy is being able to explain why the iPhone in this table can be considered an upgrade.