Lower-Price iPhone Might Succeed in Emerging Markets: 10 Reasons Why

 
 
By Don Reisinger  |  Posted 2013-01-09
 
 
 

Lower-Price iPhone Might Succeed in Emerging Markets: 10 Reasons Why


When the rumor cropped up earlier this month that Apple was developing an “iPhone Mini” model that it would release some time in 2013, many folks shrugged.

At the time it seemed that the chances of Apple offering a stripped-down iPhone for the sake of saving customers some cash was nonsense. Apple was a luxury product maker, some said, and a cheap iPhone just doesn’t fit within that strategy.

Since then, however, report after report has surfaced claiming Apple is, in fact, working on an iPhone Mini. And that device will not only be available later this year, but it will hit the market at a price that's sure to appeal to smartphone buyers in emerging markets around the world.

Better yet for Apple, the device could very well deliver the kind of profit margins the company has come to expect from other products. Simply put, a low-priced iPhone could be just what Apple needs to attract customers in emerging markets and bolster its bottom line.

Doubt still remains over whether a cut-rate iPhone can actually succeed. But further consideration indicates that there’s a good chance that the iPhone will be another big success for Apple.

Read the reasons why here.

1. The economy matters

The economy isn’t turning around nearly as quickly as many had hoped. There are people across the world who can’t afford top-model smartphones such as the iPhone, which is very much looked upon as a luxury product outside of North America and Europe. A lower-cost iPhone puts it within reach of more buyers and makes it look more like a smartphone for the masses.

2. Emerging markets are booming

According to most reports surrounding the iPhone Mini, emerging markets will be the focal point of Apple’s strategy. That’s arguably one of the chief reasons the device will succeed. Emerging markets around the world are booming. And in several countries across Asia and South America, the number of people ready to buy premium products is soaring. Apple’s iPhone Mini could easily take advantage of that.

3. iPhones represent what’s achievable

Apple has a trump card that no other vendor in the industry has. iPhones are what could be called “aspirational” products. In countries around the world where luxuries are hard to come by, buying an iPhone means a person has achieved something special. By offering a lower-priced model, Apple is bringing the iPhone within reach of more folks who will buy the smartphone to prove to friends and family that they have arrived. It’s a piece of psychological and sociological marketing that can’t be underestimated.

4. Apple plays with margins

Apple’s low-priced iPhone will succeed from a financial perspective. Granted, the device will be cheaper, but Apple has an amazing ability to squeeze out production costs and play with margins to get every last dime out of a sale. The low-priced iPhone will be no different.

Lower-Price iPhone Might Succeed in Emerging Markets: 10 Reasons Why


5. The iPad Mini works

If the iPad Mini is successful today, what makes anyone think that an iPhone Mini wouldn’t be able to follow suit? After all, consumers around the globe are obviously willing to plunk down cash on products that are underpowered but cheaper, as long as they have the Apple branding on them. Expect nothing different from the iPhone Mini.

6. No iPhone has failed

Perhaps history can be one’s guide in determining the iPhone Mini’s chances of success. There has never been an iPhone that has failed and there is no insurmountable reason why an iPhone Mini will be any different. If that doesn’t play into Apple’s favor, what does?

7. It shouldn't be available in developed countries

If Apple wants its iPhone Mini to be successful, it should limit its availability in developed countries. Places like the United States, Canada, U.K. and France shouldn’t be offered a cheap, low-end iPhone. In those markets, Apple’s iPhone 4, iPhone 4S, and iPhone 5 are selling extremely well. Playing with that formula with an iPhone Mini makes no sense.

8. China

China is an interesting marketplace. Although it can’t really be considered an emerging market any more, it’s not really a fully developed market, either. China is, therefore, a massive market opportunity for Apple. And according to reports, China is the main target market for the cut-rate iPhone.

9. Developers will jump at the chance

Developers will love the idea of Apple launching an iPhone Mini. After all, the device would be made available to a market that they haven’t yet capitalized on, and that could prove extremely lucrative. If developers fall in line—and they likely will—iPhone Mini’s sales could soar.

10. Don’t underestimate the value of iOS

Apple’s iOS is a key driver in the iPhone’s popularity. That operating system will naturally be running in the iPhone Mini. Until consumers around the globe find serious fault in iOS, it’s quite likely that they’ll pounce on the iPhone Mini partly because it’s running a popular platform. That can’t be forgotten.

Follow Don Reisinger on Twitter by clicking here

Rocket Fuel