Why Apple iPhone 8 will be a trend setter for Indian and China phone makers

Apple iPhone 8Apple will launch its latest iPhone 8 smartphone today — ahead of the festival season in several key telecom markets.

Globally, all the major operators are preparing for a major push to use iPhone to acquire new customers or lock-in existing customers on new plans.

“Unlike the early days of the Apple iPhone, all the operators carry iPhone 8 so a launch does not give competitive advantage to those that have the iPhone versus those that do not,” said Ian Fogg, senior director, mobile & telecom at IHS Markit.

Apple iPhone 8 and iPhone 8 Plus will be available in space gray, silver and gold finish in increased 64GB and 256GB capacity models starting at $699.

Apple said the expensive iPhone X will be available in silver and space gray in 64GB and 256GB models starting at $999.

Apple unveiled three new iPhone models.

iPhone 8 and 8 Plus features

# A11 Bionic chipset, 2 performance cores, 4 for efficiency. New ISP for faster low light & hardware enabled multiband noise reduction; 3 core custom GPU design.

# Glass industrial design, for better antenna performance & Qi wireless charging.

# True tone display, display unchanged from iPhone 7s / 7s Plus.

# Portrait photo lighting effects

# Price from $699 for iPhone 8, ships September 22.

iPhone X features

# Edge to edge 5.85” Flexible OLED display 458ppi with 2436×1125 pixels  , special aspect ratio as 19.5:9. Flexible OLED with On-Cell touch sensor Dolby Vision and HDR10.

# Face ID: uses custom “TrueDepth” camera: flood illuminator, proximity, infrared, dot projector, front camera, ambient light sensor.

# Adds portrait mode selfies and animoji

# Dual 12MP f1.8 and f2.4, with dual OIS.

# Price from $999, ships November 3.

Apple in India

IHS Markit said India is an interesting market, and one where Apple is looking to grow, in part through domestic production.

The analyst firm indicates that the latest iPhone will be a trend setter for rival phone makers in India and China.

If the new flagship OLED iPhone is genuinely different to other smartphones it will do two things for the mainstream India smartphone market: It will set a design theme which we will see other smartphone makers copy over the next few years, and eventually these design cues will be available in the much cheaper smartphone models from other OEMs which make up the bulk of India smartphone sales.

“And, it will act as a halo product to encourage consumers to buy Apple’s entry level smartphone models, currently the iPhone SE and iPhone 6, so consumers who are attracted to Apple’s brand pick the models they can afford,” said Wayne Lam, principal analyst, mobile devices & networks at IHS Markit.
Apple smartphone share in Q2 2017There will of course be some consumers in every country who are able to afford the most expensive iPhone whatever the cost. But Apple aims to create mainstream quality products, not a super niche luxury, not commodity products. A product which may fall into the luxury niche in India, could be a mainstream quality smartphone in Japan, USA, or parts of Western Europe.

Strategy Analytics earlier said Apple has shipped 1.2 billion iPhones worldwide cumulatively in the past 10 years. iPhone has cumulatively generated $760 billion of global revenue for Apple between 2007 and the most recent quarter of Q2 2017.

“Revenues continue to grow and we predict the iPhone will become the world’s first trillion-dollar smartphone by the end of 2018,” said Ken Hyers, director at Strategy Analytics.

The global smartphone production volume for 2017 will reach around 1.4 billion units, representing an annual increase of 4.8 percent, according to TrendForce’s latest estimation.

TrendForce estimates that the global production volume of iPhone devices (including all previous models) for 2017 will total around 227.5 million units, representing an annual increase of 5.6 percent.

Loizos Heracleous, of Warwick Business School, is a Professor of Strategy, said Apple’s introduction of a $1,000 iPhone is consistent with its business strategy of differentiation and exclusivity, targeting the higher end of the market rather than just aiming for a larger base of users.

Given that the iPhone accounts for the majority of the company’s revenues and profits and its demand curve is relatively inelastic – ie a price change has less affect on sales – this pricing strategy makes sense in terms of revenue and profit growth.

“This move is also consistent with Apple’s image in important emerging economies as an exclusive handset and as the real thing, despite the availabiligy of much cheaper imitations. While it may constrain rapid expansion of users, it strengthens the brand’s image and desirability as the mobile most people will buy when they are able to,” Loizos Heracleous said.

Baburajan K