Positioning Apple's iPhone 5S in Emerging Markets Essay

When Apple launched their iPhone 7, there was anxiety among the consumers in the middle and low-end markets, particularly in such emerging markets as India. In an article titled The Strategy behind Apple's $230 iPhone Targeted at Emerging Markets, the author, a Forbes Magazine contributor observes that in the first quarter of 2017, the shipment of smartphones had increased by 4.3 percent globally. In the same quarter, the Indian smartphone market saw a 15 percent increase in the shipments of smartphones. With full knowledge that the average consumer in the Indian market would neither be able nor willing to spend close to $700 on an iPhone 7, Apple came up with a strategy of refurbishing and selling the midrange iPhone 5 of 2013, at the price of $230 in the Indian market. This strategy would later face challenges that would culminate in a huge positioning issue for Apple. This paper is a critical evaluation of the issue of positioning the iPhone 5S in emerging markets such as India.

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The positioning of the iPhone 5S is a significant topic of study because, while Apple aims at maximizing profits, in the first quarter of 2017, the global smartphone market grew by about 15 percent ("The Strategy behind Apple's $230 iPhone", 2017). The article records that in the same quarter, the segment that Apple is targeting with the reentry of iPhone 5S (Price range $230-$310) grew by about 158 percent. Inferentially, therefore, Apple is likely to tap the potential of the rapidly expanding Indian market but was compelled to down the strategy when the government used its regulatory powers to turn down the proposal by the American tech giant. Apple continues to gain significantly from the Chinese and American markets where the statistics of the first quarter of 2017 indicated that the ASPs for the iPhones were $258 and $410 respectively.

Gayde (2017) notes that while Apple intends to sell the midrange iPhone 5S at $230, the smartphone ASP in India is about $122. This implies that the organization's 2013 product would likely face price composition because the Indian market is price sensitive ("The Strategy behind Apple's $230 iPhone", 2017). Primarily, the Indian population is young and tech-savvy but would be willing to go for the $122 priced phones as long as those phones offer the privileges offered by the iPhone 5S. Principally, the organization's positioning of the iPhone 5 in the Indian market becomes an issue because the market is dominated by the midrange android phones mainly made by Asian firms.

According to Dudovskiv (2018), the positioning strategy of Apple - that of reintroducing earlier affordable versions of the iPhone - may not necessarily boost the sales in such markets as the Indian market, but go a long way in protecting the brand name. The presence of the iPhone 5S in the market is a constant reminder of the brand. The market positioning issue at Apple has quite some impacts, among them the increase in sales in the largely tech-savvy Indian market. Additionally, the reintroduction and positioning of the iPhone will have an impact on the levels of competition because the loyal customers will shift from other brands to the iPhone 5S.

This is a significant marketing issue for the organization because in her article titled Apple is positioning a $230 iPhone for emerging markets, Gayde (2017) observes that among the reasons why the organization chose to reintroduce the earlier versions of the iPhone is the assumption that people in the emerging markets would buy the affordable version as they enhance their purchasing power to access the more advanced versions. Inferentially, the current strategy of reintroducing the older versions of the iPhone would impact the future purchases of the latest iPhones because there is the possibility of loyalty developing among the emerging market consumers.

References

The Strategy behind Apple's $230 iPhone Targeted At Emerging Markets. (2017, May 9). Forbes Magazine. Retrieved on April 19, 2018, from https://www.forbes.com/sites/greatspeculations/2017/05/09/the-strategy-behind-apples-230-iphone-targeted-at-emerging-markets/#6d6d54e45415

Gayde, W. (2017, May 9). Apple is positioning a $230 iPhone for emerging markets. TechSpot. Retrieved on April 19, 2018 from https://www.techspot.com/news/69254-apple-positioning-230-iphone-emerging-markets.html

Dudovskiy, J. (2018, Jan 18). Apple Segmentation, Targeting and Positioning. Research Methodology. Retrieved on April 19, 2018 from https://research-methodology.net/apple-segmentation-targeting-and-positioning/