According to analysts, the low-cost 5G model of its iPhones would help Apple Inc to boost its appeal in the Asian market, – a market where the iPhone maker is rivalling with a slew of rivals ranging from South Korea’s Samsung to China’s Vivo.
Ever since the Covid-19 pandemic Apple has been facing supply chain issues just as other electronic companies and had thus accorded its focus on high-end phones. Earlier this week however, the company has announced 5G connection for its $429 iPhone SE. According to analysts, this will help the company to make its iPhone offers more appealing for a larger section of lower-end shoppers in emerging economies.
“The new 3rd gen iPhone SE could be effective in gaining incremental share among price sensitive consumers, especially in Asia,” Cowen and Company brokerage said, citing China and India in particular.
According to Counterpoint Research, the 4G iPhone SE accounted for 12 per cent of total iPhone sales from Q2 2020 through the end of 2021, with Japan being the second-largest market after the United States.
“This time we expect demand to open up more across other markets like Europe, SE (South East) Asia and Korea – regions where many consumers stayed away because of the lack of 5G support (for the older SE),” Counterpoint Research analyst Sujeong Lim said.
According to a previous Counterpoint, Apple, the world’s most valuable business with a market valuation of roughly $2.6 trillion, attained its greatest ever market share in China at the end of last year, surpassing Huawei to become the biggest seller.
The new small-screen 5G phone’s $30 price increase over the 4G version should cover most of the higher costs from the improved technology, according to Cowen and Company analyst Krish Sankar, albeit margins would be lower than the $699 iPhone 13 mini.
In comparison to the iPhone 13 mini, he anticipated that the iPhone SE would earn a gross margin of 42 per cent to 54 per cent, or nearly half the gross profit for each handset.
“We believe a renewed affordable iPhone SE lineup should buoy consumer interest in iPhones versus investor fears of sharp declines,” Citi analyst Jim Suva said.
(Adapted from Nasdaq.com)