iPhone 5c not cheap enough for emerging APAC markets

iPhone 5c not cheap enough for emerging APAC markets

Summary: Compared to its rivals' offerings, the new iPhone targeting emerging markets is a "disappointment" for consumers in developing markets such as China and India, and Apple is losing its "wow factor".

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The iPhone 5c is not cheap enough to attract consumers in emerging Asia-Pacific markets, especially with the lack of reliable 3G and 4G networks in the region, while the incremental improvements in the iPhone 5s do not appeal to customers of the developed markets.

According to Phil Harpur, senior research manager of Frost & Sullivan's ICT practice, the iPhone 5c is a "disappointment" for emerging markets in the region such as China and India. These markets are price-sensitive and look for cheaper options, and this does not fit with Apple's brand, Harpur said, speaking to ZDNet Asia in an interview following the iPhone launch on Wednesday.

iphone5c-thumb620x465
"It looks like a phone for kids because of the stupid colors," says iPhone 4 user, Joey Chapman

Apple unveiled the iPhone 5s, its lower end iPhone 5c, as well as the latest version of its mobile platform iOS7. With a 2-year telco service contract, the iPhone 5s 16GB model costs US$199, while the 32GB is priced at US$299 (32GB), and the 64GB is US$399. The iPhone 5c 16GB model costs US$99, while the 32GB model is priced at US$199.

Within Asia, the new iPhone 5s will be available in Japan, China, Hong Kong, and Singapore from September 20, 2013.

Harpur pointed out that the lack of reliable 3G and 4G networks in emerging Asian markets also made it less compelling for consumers to pay a premium price for smartphones.

It is becoming difficult for Apple to have any real competitive advantages, he said, adding that rivals such as Samsung, HTC, and LG all offer smartphone models at lower pricepoints and which are taking off in emerging Asia-Pacific countries.

In markets that are less price-sensitive such as Singapore, Australia, and New Zealand, while the price tag does not make the latest iPhones less attractive, the new smartphone models do not have anything new to offer the market, Harpur pointed out.

Even though the iPhone 5c is slightly more price-competitive, there is a lack of innovation so it is "equally disappointing" to developed markets in the region, he said.

Singapore-based engineer Shawn Lee, too, told ZDNet Asia the incremental changes in iPhone 5S were expected, apart from the fingerprint sensor and large-camera sensor, and hopes iPhone 6 will come with more major changes.

"Apple is already pretty far down the path of incremental improvements. They seem to be losing the innovativeness and the 'wow' factor that was key to their rise," Lee said.

"There's no denying Apple takes the cake in industrial and product design, but I'm an advocate of change and the lack of change in Apple's design is a turn-off for me," said the engineer, who is a Samsung smartphone user. "The iPhone 5s looks good but boring after being in the market for so long. And even though the iPhone 5c adds color, it sticks to the same design language." 

Higher security could offer enterprise potential

However, the iPhone 5s offers increased security which can offer enterprise potential, observed Carolina Milanesi, Gartner's research vice president of consumer technologies and markets, referring to the new biometric function as an example. 

Jan Dawson, chief telecoms analyst of devices and platforms at Ovum, added that the new fingerprint scanner should make the device more appealing as it marked the first time a big-selling device offers such a feature.

However, overall, there are no other features that make the phone better or more attractive than its predecessor the iPhone 5, especially when BYOD and the use of high-end devices already have been generally accepted by most organizations, Harpur pointed out.

Consumers unimpressed, unwilling to switch

Consumers with Android devices and older generations of the iPhone told ZDNet Asia they had no plans to switch over to the iPhone 5s or 5c.

Lin Surong, who currently owns a HTC phone, said while the iPhone does not become laggy after prolong use, it still has features that "irk [her] as a consumer" such as the non-expandable storage and built-in internal battery. And she is not impressed by the fingerprint sensor, which she described as "dodgy" since such features often do not work properly on laptops that offer them.

Lee added he would not switch over to iOS as he liked the customization and open source nature of Android.

Peace Chiu, an iPhone 5user, too noted that while Apple made an effort to make iPhone 5s more visually appealing and added features such as the fingerprint scanner, she would not be considering an upgrade. "I don't think it's enough to convince me to switch to iPhone 5s since I find my current phone adequate. The switching process tends to be quite troublesome as well," Chiu said.

Joey Chapman, another iPhone 4 user, added the changes to iPhone 5s and 5c were insignificant and her current phone still works well. 

"It [also] looks like a phone for kids because of the stupid colors," Chapman said.

Topics: Smartphones, Apple, iPhone, China, India

Ellyne Phneah

About Ellyne Phneah

Elly grew up on the adrenaline of crime fiction and it spurred her interest in cybercrime, privacy and the terror on the dark side of IT. At ZDNet Asia, she has made it her mission to warn readers of upcoming security threats, while also covering other tech issues.

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16 comments
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  • what?

    "Summary: Compared to its rivals' offerings, the new iPhone targeting emerging markets is a "disappointment" for consumers in developing markets such as China and India, and Apple appear to be losing its "wow factor"."

    Why does everyone keep saying the iPhone 5C is targeting emerging markets? I've never seen Apple say or imply anywhere that the iPhone 5C is doing anything of the sort... I think Apple made this for many reasons, and I seriously doubt emerging markets was the primary focus. I just hear the rumor mill saying that is what the 5C was supposed to be for. Why not just say the 5S is targeting emerging markets too and say Apple did even worse there? Heck.. say its targeting Lunar and Martian markets, then we can criticize them for it not selling any units there.
    doh123
    • why

      Because Apple is not a dominant player in any emerging markets and is about to stop being a relevant player in any of them, due to better alternatives being available at much better prices. Since the edge in Apps is important, it is likely that losing emerging markets is something permanent.

      The obvious strategic counter would have been to enter the lower cost segment with a new, cheaper product. Apple released a new cheaper product. By pricing it high they made a statement that they don't care about emerging markets.
      Sacr
      • You're delusional.

        "Apple is not a dominant player in any emerging markets and is about to stop being a relevant player in any of them" Apple is the only company, aside from Samsung, that's making any money on smartphones, and it's ecosystem is the most lucrative, for Apple AND developers. While you can argue over whether that makes them dominant or not, no one sane would question their relevance.

        "Apple released a new cheaper product." Not really, the iPhone 5C is an iPhone 5 in a plastic case.

        "By pricing it high they made a statement that they don't care about emerging markets." Again, not really. They just made a statement that they're not going to to foist cheap crap on emerging markets and call it an iPhone.
        matthew_maurice
        • Delusional?

          "Apple is the only company, aside from Samsung, that's making any money on smartphones, and it's ecosystem is the most lucrative, for Apple AND developers. While you can argue over whether that makes them dominant or not, no one sane would question their relevance."

          First: What's that got to do with them not being a dominant player in emerging markets? My statement was that they aren't. Your statement doesn't change that. Also, your statement is wrong, there are various companies making money in smartphones, from Microsoft to Xiaomi.
          Sacr
        • @matthew_maurice

          "Apple is the only company, aside from Samsung, that's making any money on smartphones"

          If you have looked into the number of iPhones sold in India/China, you will understand that they make most of their money in the developed market. And Sacr was referring to the developing markets.

          "Not really, the iPhone 5C is an iPhone 5 in a plastic case. "
          That really makes it a cheaper product(in the Apple eco system). Apple fans used to call Samsung as a cheap plastic clone of iPhone. If they do not change their stance then iPhone 5C is a cheap phone for sure.

          "They just made a statement that they're not going to to foist cheap crap on emerging markets and call it an iPhone."
          In that case, they still could have released an iPhone with lesser internals which won't affect the performance *much* and could have released an even low cost phones. If you look at the markets which will receive iPhone 5c first, you would have noticed that only China in the BRIC countries, was on the list.
          spicycheeks
          • Apple will lose more market share

            And its following Nokia's steps. If MS some how busy them out, it will become hilarious. MS can preserve its market share! Win win for MS. Now how would an iPhone with Win 8.1 look like?
            Uralbas
        • Wrong-Microsoft makes a fortune

          on Android phones alone, 3 billion a year
          jthompso@...
  • Nokia Dominates The Low End Market

    Nokia are already dominate the low end market phone.For Example We can see on Nokia Lumia 520 sales in China & India marketing are growing much faster that we could expected
    Anonymous1511
    • Dominate

      It's doing very well for a Windows Phone, but I wonder how well it fares against the local brands? Just asking because I do not have numbers.
      Sacr
      • @Sacr

        I too do not have the numbers. But I am easily say that "dominate" is a too strong a word. Local players actually dominate. This is the case, at least here in India.
        spicycheeks
  • One wonders

    Whether they may even be priced out of developed markets as well, $1000 to buy outright 32gb S version in Australia.!.
    yofuss
  • You gotta be kidding

    Just Apple hating going on here. Never hear too much of this crap in regards to other companies. Apple is not trying to be the only thing to buy in emerging markets. They are Apple and their products are at the high end and command a higher price. Apple customer satisfaction in Asia, especially Korea, is heads and shoulders above the competition including Samsung's offerings. Have to completely agree with Matthew... Apple is NOT going to produce a cheap piece of plastic, slap on an Apple logo and call it an iPhone! And if you don't like "Apple Care" then don't purchase it, simple as that. Every company offers a protection plan on their products and you either get it or not. As far as Apple goes, I've skipped on Apple care but for my large screen Samsung, you bet I got a plan because of their at times "shady" manufacturing process. If Apple would have offered a large screen phone I'd have gotten it but Samsung was my only choice.
    u74s1r
    • huh Samsung

      Instead Samsung you can choose big screen phone out there such as Sony Ultra Z ,Z1 and LG G2. You think Samsung only produce android phone?I think Other android OEM make better product if compare to Samsung does.
      Anonymous1511
    • @u74s1r

      "Apple is NOT going to produce a cheap piece of plastic, slap on an Apple logo and call it an iPhone"

      They already did. They call it as iPhone 5c.

      "Every company offers a protection plan on their products and you either get it or not."
      Yes and most companies offer it FREE.

      "I got a plan because of their at times "shady" manufacturing process"
      And? You have a document with the step by step manufacturing process of iPhones by Apple? And you believe Apple follows any such thing(if made available to the public) to the content? Heck, Apple won't even release how they audit Foxconn.
      spicycheeks
  • I hope she's referring to the carrier process and not...

    "The switching process tends to be quite troublesome as well," Chiu said."

    ...the technical process. Apple has made switching phones very simple to do.
    ye
  • I wouldn't be surprised to see more of this thinking.

    "Joey Chapman, another iPhone 4 user, added the changes to iPhone 5s and 5c were insignificant and her current phone still works well."

    Not only with the iPhone but other phones too. Smart phones have matured to the point where people are satisfied with what they have.

    ""It [also] looks like a phone for kids because of the stupid colors," Chapman said."

    IMO that's a huge understatement.
    ye