When the iPhone SE launched in 2016, it was an incredible phone that received an excellent response in developing markets like India. It was actually the first time Apple took a stab at a mid-range device as its previous attempt with the iPhone 5C flopped. 

So when last week, Apple Analyst Ming-Chi Kuo revealed Apple is working on iPhone SE 2 and it could launch in the first quarter of 2020, there’s been a lot of excitement around the prospect of an affordable offering by Apple post the initial success of the iPhone 11. He also predicts the phone will be powered by Apple’s latest A13 processor and will have a design similar to the iPhone 8, however, the most important factor that’ll decide the phone’s fate is the price.

Kuo revealed today that the iPhone SE 2 may come with a starting price of $399 (Rs 28,300). This is the same price at which the iPhone SE was launched in 2015, but in India, it could be quite a bit more, though still, it will be great news of Apple fans in India. 

  • For the Indian market, as most products are fully imported, usually, Apple does dollar-to-rupee conversion rate to be Rs 100 for all Apple products. Even in the case of iPhone 11, it retails for $699 in the US while India’s price starts at Rs 64,900. So even if we convert $399, the India equivalent will be Rs 39,990. Obviously, the price could reduce slightly if the phone’s made in India, but that may be a long shot initially because Apple has only started assembling the iPhone in India via Wistron. 
  • Even if local sourcing is possible, Apple could ideally launch the phone with a Rs 40,000 price tag, gauge response, and then decide whether a drop is required. If the sales hold up, there won’t be a need to dilute the brand.
  • At Rs 40,000, Apple will be able to reach out to more users as well as make its iPhone lineup transparent. This would also give Apple wiggle room to sell the iPhone 8 and iPhone XR which will admittedly have inferior cameras and processors. 
  • Recently, the company sold the iPhone XR for just Rs 45,000 and the response was phenomenal. Even though the offer was applicable on a limited-period sale, it showed that people want to buy an iPhone, but the price is a primary factor limiting them. At Rs 40,000, Apple’s offering also starts looking quite competitive to Android phones like the OnePlus 7T.
  • Apple’s hardware is a better value proposition as now its services are not only working in India, but they bring something unique to the table. For instance, in India, the recently announced Apple TV+ subscription is free for a year which will convert to the prospective iPhone SE 2. Even Apple Music as well as Arcade have a free trial. Apple Maps also now works in India while Siri now understands the Indian dialect.  

If Apple is able to ramp up local sourcing and have its online store up and running in India by Q1, 2020, there is a possibility that could reduce the price of the iPhone further. Regardless, there will be discounting schemes which will make this phone easily the first sub Rs 40k iPhone in a while-which is a good thing net-net. 


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