Despite market growth in the first three months of 2024, Apple saw its market share swallowed up by other brands. The outlook for the rest of this year doesn’t look too bright, with the company expected to see further declines in sales in China, one of its most important markets. Meanwhile, Android is expected to grow twice as fast as iOS. Some people think Apple should release an iPhone priced around $250 to turn things around.
The iPhone is Apple’s biggest cash cow, and China is the Cupertino giant’s second-largest market. And while not all current iPhone owners in the country have lost interest in Apple’s iPhones, the company needs to do a better job of attracting new buyers and helping existing owners upgrade faster. be.
The pace of upgrades has slowed elsewhere as well, with new initiatives like the “New Reasons to Upgrade” section on Apple’s website explaining it. And since Apple hasn’t made much of an effort to differentiate each generation of his iPhone significantly, there’s not much reason for buyers to upgrade frequently.
For a while, revenue generated by the services and accessories category offset weak iPhone sales, but that strategy is being squeezed hard.
bloomberg Journalist Mark Garman believes Apple needs to make a cheaper iPhone to expand into developing markets.
The company is rumored to be working on a new iPhone SE model, which will likely cost $400. Consumers in emerging markets are more likely to buy $150 phones with larger screens and more cameras made by Chinese companies.
Garman thinks Apple should make phones for emerging markets that cost about $250 and use cheaper components, such as LCD screens and plastic bodies.
Achieving such products now requires a shift in strategy to focus on high profit margins and premium products. Steve Jobs once said, “We will not provide inferior products that have been stripped down to the bare essentials,” and Apple still adheres to that philosophy.
However, Apple recently started selling the $699 M1 MacBook Air through Walmart, so it may be considering new ideas to stay competitive.
If Apple enters developing markets with cheaper phones, it could upsell consumers to more expensive phones and hook them on its services and apps.
However, as Garman points out, discussions about making a cheaper iPhone have stalled because Apple doesn’t want to dilute its luxury brand. Don’t get your hopes up.
