iPhone 5c not cheap enough for emerging APAC markets

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".
Written by Ellyne Phneah, Contributor

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.

"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.

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