[Mobile.AI] Apple withdraws iPhone 4 from Indian market
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Wed May 7 10:50:46 EDT 2014
Apple withdraws iPhone 4 from Indian market
May 7, 2014, 10.24AM IST ET Bureau[ Writankar Mukherjee ]
Less than four months after relaunching iPhone 4, Apple decided to once again withdraw its only phone below Rs 20,000.KOLKATA: Less than four months after relaunching iPhone 4, Apple decided to once again withdraw its only phone below Rs 20,000, appearing to ease up on its strategy to push volumes in emerging markets such as India to protect margins.
The move comes as Apple reported a $41 drop globally in the average selling price (ASP) of the iPhone to $596 in the quarter ended March, which analysts blamed on the relaunch of the iPhone 4 and the cut in iPhone 4S prices in emerging markets.
Three of Apple's leading trade partners said fresh supplies of the iPhone 4 in India have stopped in the past two weeks and the company has already indicated to its trade partners that it won't be taking fresh orders for the model.
An email sent to the Apple spokesperson at regional headquarters in London did not elicit any response till the time of going to press. Apple had decided to resume production of iPhone 4 to compete harder in markets such as India, Brazil and China.
It will now pull out the product from all markets, one of its trade partners said. Another partner said the iPhone 4 had served its purpose in India: it doubled the consumer base of iPhones to more than 25 lakh people in one year. And, iPhone users generally being brand loyal, it's unlikely that these users will migrate to any other brand, the person added.
Four months of relaunch, Apple decides to withdraw iPhone 4Trade partners also said that the iPhone 4s has emerged as the firm's top-selling phone after Apple launched a Rs 7,500 buyback offer last month, reducing the gap with the iPhone 4 to Rs 3,000.
"With the buyback offer, iPhone 4s is now Apple's largest selling model by the number of units sold and also amongst our top five selling models," said Himanshu Chakrawarti, CEO at The Mobile Store, India's largest cellphone retail chain. Since the buyback offer, retailers said iPhone 4S sales have doubled in India.
"It's been a tactical move by Apple whereby consumers are willing to pay a little more for a newer model." said Sathish Babu, founder of cellphone retail chain UniverCell Telecommunications, referring to the buyback offer. One trade partner said that besides the slide in average selling price, a technical issue also influenced Apple's decision to withdraw the iPhone 4.
"Apple has been globally chided by the tech community for the poor performance of its latest operating system on iPhone 4 and hence this factor too played a role... since it mars the entire Apple experience among first-time buyers," the person said.
During Apple's quarterly earnings conference call last month, analysts such as Toni Sacconaghi of brokerage firm Sanford C Bernstein questioned the management over the steep fall in the average selling price and its relation to the iPhone 4 relaunch.
The management conceded that rising demand for entry models - mainly the iPhone 4S - in emerging markets in Latin America, Asia-Pacific and Eastern Europe contributed significantly to the slide in the average selling price. However, Apple CEO Tim Cook said the impact of the iPhone 4 was minimal as the firm sold "a very low single-digit percentage of those" in the quarter.
Apple had reported record sales for iPhones in Brazil, Russia, India and China in the last quarter, with sales doubling in India. Retailers said this was driven largely by the iPhone 4 and the iPhone 4S. As per the latest data from market tracker CyberMedia Research, iPhone shipments have doubled in the last quarter to more than 3 lakh units over the same period last year.
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