Cheaper iPhone 5c in India: Why Apple is launching 8GB models for the Indian market?


If the Indian smartphone market has proved anything over the last few quarters it’s its love for large screen devices suited for multimedia consumption. India loves to watch movies, TV shows, and music videos on the go and larger the screen, the better the experience. Or at least that’s what common wisdom suggests.

 

Of course the crucial pieces in this formula are the large display and large capacity for all those movies. A microSD card is the weapon of choice for the Indian multimedia consumer and phones with low fixed internal storage are a big no-no for the mass market. Which is why Apple’s announcement of an 8GB iPhone 5c comes as a shocker, especially following the re-launch of the 8GB iPhone 4, but don't colour us surprised.

 

We have no doubt that a lot of folks actually want an iPhone. It remains the ultimate status symbol for many Indians and so what if it’s just an iPhone 5c. But we have big doubts about whether anyone would buy an 8GB iPhone 5c. 8GB may have been enough storage two years ago, when the App Store was still evolving, but newer apps, especially HD games, require a lot of local storage. It’s just not enough when popular games such Xcom, Deus Ex, Asphalt 8 have download sizes close to a gigabyte, and require a lot more space locally after installation.

 

Apple has a strong iCloud offering for other multimedia needs. You can store your iTunes purchases in the cloud to have them ready for all your devices. The company is betting that your storage needs will move to the cloud soon enough, as mobile broadband speeds climb up. It reckons 8GB is enough for a basic experience, but even if it is, the price is also terrifying.

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At Rs 37,500 officially, the 8GB iPhone 5c is close to the price of phones such as the Galaxy Note 3 and the LG G2, both of which trump the iPhone 5c for screen real estate and storage size. Both are made of plastic too like the iPhone 5c, so you are not trading off a metal body. The G2 is available in 16 or 32GB versions.

 

Better still there’s the HTC One M7, still a very good phone, that’s about to receive an Android KitKat update. The One M7 is as premium feeling as the iPhone 5s, with a superb metal design and features one of the fastest processors in the market. The only downside for the M7 is the camera, where the iPhone has the better of it.

 

Apple may see some margin-related benefits in this strategy in the short run with sales helping boost the overall revenue from India. But that’s not the only reason. The smartphone battle is no longer about specs. Nearly all manufacturers can match each other in terms of specs. Now the battle is about creating and locking in users to your ecosystem. It’s about tying users to your services, so that it becomes hard to let go.

 

The game is simpler for Apple now. Just sell an iPhone to a user, get them to buy apps and contents, and lock them in, making it harder to switch to Android or Windows Phone. Apple, for all its flaws, does have a very strong ecosystem, some argue stronger than Android too.  So by offering a lower-priced (not necessarily better value) iPhone and throwing in attractive EMIs and buyback offers, it’s also hoping to score more future loyalists. It doesn't have to be wildly successful at the moment, just enough so Apple can reap the long-term benefits.


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