Latest Apple revelation may not impact India sales

IPhone sales in India may not be affected by the revelation that Apple released software to slow down previous generation smartphones as buyers continue to look at it as an aspirational brand.

Apple has a very strong brand recall value in the premium segment, a long-term performance issue will impact its market share given that other players have started creeping into a segment dominated by Apple and Samsung till a year ago, say analysts.

Last week, Apple increased prices of its phones in India following increased taxes on imported phones. The prices increased by an average of 3.5 per cent except in case of the iPhone SE, which is assembled in India.

“In November, Apple commanded a 42 per cent market share by volume in the premium segment here. Further, half of this base is using older models and they are eager to upgrade to higher models irrespective of slowdown,” said Tarun Pathak, associate director, Counterpoint Market research.  

Pathak said that while Apple continues to be the number one choice in the premium smartphone segment, other players are fast catching up. Many analysts had already predicted that with the iPhone 8 and the iPhone X being launched back to back, the latter was likely to get higher traction from existing users.  

Interestingly, Apple has tied up with Reliance Digital in India, apart from e-commerce channels such as Flipkart and Amazon, to offer lucrative offers to ensure a strong presence in the premium segment here.

Earlier in the week, Counterpoint had shared estimates noting that Apple had earned $150 worth of profit on every iPhone sold over the the third quarter, which is five times higher than what Samsung phones earned during the same period.

However, globally, Apple’s admission that it  throttled performance of previous generation phones has got it lawsuits with several people accusing it of cheating customers.

The company has also offered $50 reduction in battery replacement charges on affected phones through 2018 reducing the effective price to $29.

“About a year ago in iOS 10.2.1, we delivered a software update that improves power management during peak workloads to avoid unexpected shutdowns... in some cases users may experience longer launch times for apps and other reductions in performance,” said the company in a statement.

The affected phones are the iPhone 6, the iPhone 6 Plus, the iPhone 6s, the iPhone 6s Plus, and the iPhone SE (locally assembled in Bengaluru). Apple will also issue an iOS software update with new features that gives users more visibility into the health of their iPhone’s battery. 

The company attributed slower performance to chemical ageing of the batteries in the older iPhone 6 and iPhone 6s devices, many of which are still running on their original batteries.

Earlier in the week, eight lawsuits were filed across various US courts and one in Israel accusing the company of deliberately slowing devices to cover up poor battery performance.  Last week, the company had acknowledged a software update introduced early last year to smoothen power supply in old batteries.

The lawsuits claimed that the software update caused users to believe the phones were slowing down due to a problem in the processor, urging them to buy new phones, while a battery replacement could have resolved the problem at much lower costs.