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Apple might cut iPhone SE cost in India to increase appeal, remain competitive

The cheapest iPhone currently on offer from Apple happens to be the iPhone SE. At Rs 42,500, the phone compares well with its rivals in the budget flagship segment such as the Galaxy S10 Lite which has also emerged as among the most sought after Android phones.

That said, given the intense competition in the Android smartphone segment, Apple may soon have to find ways to reduce the price of the iPhone SE further if it wishes to remain relevant in the entry-level flagship segment. Specifically, Apple might have something to worry about with the new Pixel 4a which, according to reports currently available, may have 128 GB of storage on the base model while being priced around $349.

In contrast, the cheapest iPhone SE version comes with 64 gigs of storage and is priced $399. A permanent price cut will not only make the phone remain competitive; this will also lead to more users be attracted to the Apple ecosystem. From an Indian perspective, the iPhone SE can be purchased for as low as Rs 39,900 if you take into account the offers being doled out to HDFC Bank users. Special discounts such as those during festive seasons or other occasions can further drive down the price by a few thousands more.

However, as analysts have found out, the iPhone SE has a 54 percent component cost margin which is considered among the highest for any device launched in recent times. For Apple to bring down the price of the phone, it will have no other choice but to absorb some of that cost. That will be a way to make the device accessible to more users.

Apple will still have a lot to gain as more getting into the Apple fold will mean more getting to use its services. The latter again serves gross margin of 65.3% compared to the about 30.4 percent margin that product sales have to offer.

Apple is also reported to have initiated steps to hive off about $40 billion word of production to India. That might include the iPhone SE as well and if that is true, locally produced phone itself might rive the cost down. On the whole, it could be exciting times ahead for Apple fans in India, or who’d like to switch their allegiance to Apple from Android.