Apple is reducing the selling price of the latest iPhone XR by up to 22% from Friday to boost sales.
KOLKATA: Uncharacteristically for Apple, it is reducing the selling price of the latest iPhone XR by up to 22% from Friday to boost sales in the face of stiff competition in the premium smartphone segment in the India where it is in the third position as per latest data from market trackers, three senior industry executives said.
The executives said Apple had never reduced the selling price for its latest and flagship iPhone models. Earlier there were mostly cashback offers, no-cost financing and exchange programmes. The company is dropping the selling price of all the three variants of iPhone XR – the 64 GB will be sold at Rs 59,900 as compared to Rs 76,900 earlier, while the 128 GB will be sold at Rs 64,900 from Rs 81,900 earlier and the 256 GB model will be sold at Rs 74,900 from Rs 91,900 earlier.
Apple will also run a limited period cashback programme from Friday on HDFC BankNSE 0.51 % cards offering 10% cashback whereby the effective price of iPhone XR (64GB model) for a consumer availing it will be Rs 53,900.
One of the three sources quoted said the 18-22% drop in the selling price of iPhone XR is to bring down the price of iPhone XR to pricing level of the similar flagship model of 2017, the iPhone 8. When Apple launched iPhone XR last September, the price was 20% more than the iPhone 8. Apple had to increase the launch price of the new iPhones last September due to the depreciation of the rupee against the dollar and 20% import duties since it does not manufacture its flagship models in India.
However, Apple will not change the sticker price or maximum retail price (MRP) of the iPhone XR in India. Instead, the company is adopting the market operating price (MOP) strategy in India which competitors like Samsung and Xiaomi follow and where the official consumer selling price is lower than the MRP.
For Apple, its MRP has been its official MOP, through online and offline retailers offered some discounts. Apple drops MRP when it launches new smartphone models in September.
“Apple runs promotional schemes for consumers but has rarely undertaken such promotional pricing. It is unlikely it can go back to the earlier MRP regime for iPhone XR in India now since it will then be difficult to attract consumers after this drop,” said an executive. An email sent to Apple seeking comments did not elicit any response.
After announcing the Oct-Dec quarterly results, Apple CEO Tim Cook had said in an analysts call that Apple in January had absorbed part or all of the foreign currency fluctuations in some markets to get close on the local price for the new iPhone models from a year ago.
Cook had then said that the price correction was done in some locations and some products. Cook had said foreign exchange disparity had amplified the price of the new iPhones in emerging markets.
The latest iPhone XS and XS Max were launched in India with a 13% mark-up than the latest model of the previous year. Analysts had then said the pricing made India one of the most expensive places to buy the latest iPhones.
(This story originally appeared on The Economic Times)