Apple’s “Smart” plan on becoming the “Boss” in Smartphone industry!
There’s no better time to talk about Apple’s smartphone game than now. Apple just announced its brand new iPhone 12 line and everybody started talking about it. Apple the apple fans are sharing pretty much everything about iPhone 12 while die-hard android fans are making fun of the new model as usual. Yes, other than the boxy design and compact look, it’s pretty much the same as the previous generation. But on top of new product releases, news, memes, and other things we see on the internet, there’s a genius strategy behind Apple’s approach to become the market leader in the smartphone industry.
We all should thank apple for revolutionizing the smartphone industry by introducing the very first iPhone back in 2017. Back in the day, everything was about cool new features, designs, and software components you get along with a regular phone. Fast forward to 2020, we all have to admit that the smartphone game has slowed down. Every new flagship smartphone release is just the last year’s phone with a small upgrade on camera, processor, or the design.
The smartphone industry has come to a place where there is not much innovation to take place. Smartphone sales are dropping by 20% (Gartner,2020) mainly because of the pandemic and it is pretty clear that smartphone manufacturers are having a tough time. Talking about Apple, they were never able to take the driving seat in the smartphone world.
Samsung was the world’s largest smartphone vendor for years but very recently Huawei was able to pass Samsung and became the number one. Apple is sitting at 3rd place for years now and that was mainly because their approach was to sell their products to a limited market niche by keeping a considerably large profit margin. As a company, Apple wants to overtake Huawei and Samsung, not just because they are the largest smartphone manufacturers in the game, but also because they are not US companies. Huawei is a Chinese company which created a lot of controversies lately and Samsung, which is a Korean company and it took over the global smartphone market like a storm. By diving into the recent announcements made and products launched from Apple, it is clear that they take this competition very seriously and they are desperate to take the driving seat as the world’s biggest tech brand. The following moves taken from apple will help you understand how smart their strategy is.
iPhone 12, leading the game!
Apple just announced its brand new iPhone series. Everybody waited for it, and here is it, finally! Amazing cameras with, A14 bionic chip which is by far the best smartphone processor ever, and MagSafe making a comeback, yes it simply is a great device. Launching a new iPhone is a big deal in the tech world, but what is the approach by apple this year to make it stand out?
5G definitely is a big deal. But iPhone 12 is not the first-ever 5G capable smartphone. What makes it special is their partnership with Verizon, by actually making it happen in the telecommunication industry. Apple knows that a pen with no ink is simply useless, that’s why apple wanted a telecommunication service provider to provide a solid 5G network.
Talking about Apple’s pricing strategy, they want to keep it as solid as they can. But with a pandemic going on, they have to make changes to their pricing structure. Instead of showing the price increment of the iPhone, they introduced a “mini” version to the iPhone family. iPhone mini is way too small for most smartphone users but Apple knows that people might still buy it because of the design and “of course it’s an iPhone”. iPhone 12 mini starts at $699, but the actual equivalent model of iPhone 11 which started at $699 last year, the iPhone 12 now starts at $799. So they actually tricked you by launching this “mini” iPhone.
No price change with “Pro” models? Why? Probably because Apple knows that those “Pro” customers are Apple’s ideal customer base who tend to buy more Apple products and services.
Apple Launching iPhone SE in the middle of a pandemic
iPhone SE is one of the most loved sub-brands by apple users, mainly because of the 1st generation iPhone SE which was released in March 2016. Apple decided to take that SE branding out from the box all of a sudden after 4 years, in the middle of a pandemic by announcing the 2nd Generation iPhone SE which marked a retail price of $399. But why? what is the point of releasing an old-looking, boring phone which looks exactly like the iPhone 8 all of a sudden?
That’s where Apple’s genius decision-making comes into play. Apple is dominating the US smartphone market share by keeping over 40% but in other parts of the world, smartphone markets are dominated by Chinese smartphone companies by leaving apple a share of less than 20%. (refer to the graphic). In a price-sensitive market like India, Apple is not even in the top 5 smartphone brands in terms of sales. That is mainly because Apple’s flagship devices are way too expensive for this large market segment. By following table, it is clear that price is the main factor of consideration when it comes to massively diversified markets like India.
Apple’s iPhone SE is the perfect fit for general consumers who prefer mid-budget smartphones, who couldn't afford an iPhone. If you ask a random person, “What matters to you the most in a smartphone” the answer probably is either camera or performance. Apple knows it better than anyone. So they took the same design from iPhone 8 and merged it with a super-fast A13 Bionic chip, the same processor came with iPhone 11 Pro. They used the same, most loved camera from iPhone 11 iPhone SE. Launching a phone with a fingerprint sensor is ideal because everyone wears masks because of the ongoing pandemic. You get all these features with great apple stock apps, iOS, and most importantly the product support for probably more than 7 years. All that comes just for $400!
Apple is now able to convert more android users who were using mid-budget phones. In Apple’s business perspective its; low prices, high sales and more users. If you think Apple’s goal is just to sell smartphones to mid-range smartphone users, you are mistaken. If Apple can get more Apple users into the ship, they can upsell them with other products like AirPods and AppleWatches to those consumers to get them into the Apple eco-system. But the chance of a price-sensitive consumer buying an AirPod or AppleWatch is very low because of their prices. But in September 2020, Apple announced it’s AppleWatch SE which starts at $279. Now Apple seems to create a low-cost “SE” eco-system for these Average users .
Not only product upselling, but also “Apple Subscription Based services”. Apple wants to get more people into their boat because then they can get more people to subscribe to their services like iCloud, Arcade, AppleMusic and News, etc. Subscriptions are one of the solid ways for apple to make income. Now you understand, this tech giant is not just planning to sell smartphones more but also, they want to get more people into their subscriber base. A recent youtube video by Arun Maini (@Mrwhosetheboss) nicely explains how Apple is trying to get more subscribers to their list.
Not only devices but also the OS! iOS 14, It’s all about customisability!
Apple released the latest update of iOS, and everybody started loving it, not surprisingly. It really is a great OS update packed with many useful features Apple users waited for years. Android users were making fun of iOS because it took 13 years for Apple to introduce small things to iOS like adding widgets and customizing apps on the home screen. It’s true that Apple was so late to jump into the bus, but somehow, it is nice to see that Apple is actually making these changes. Apple users waited for these small changes like widgets, App Library, pin messages, compact UI, and picture in picture video play for years. We all know that, as the giant in the tech company, Apple could introduce these features way before, but why now all of a sudden?
Now we’re coming to the same point, converting android users to buy iPhones and Apple to become the smartphone giant! Now android users are allowed to do pretty much everything they got used to in their android operating system. The intention of apple with iOS 14 is clearly not to make life easier for current iPhone users. They want to sell iPhones more and more to android users. Samsung’s and Huawei’s sales are dropping with the pandemic and Apple wants to take the maximum out of this by offering all the possible features to get more users into the club.
Yes, It is clear that where apple wants to go. It is not a bad thing as a company to make profits and lead the industry. What matters to the consumer most is the value-for-money. If they get it, great! If not, what is the option? Apple has already made a name for providing the best privacy protection features, continuous security updates, and support, so there is nothing to worry for Apple users. I personally believe it is not the best option to depend on one brand as a consumer. End of the day, it’s all on consumers to make the right purchase decision.