iPhone 5s/5c: Managing expectations

With a pre-launch hype and by restricting the numbers put on retail shelves, Apple made its new introductions aspirational

The launch of iPhone 5S and 5C in the Indian market, barely two months after the product hit the US market, was a gamble for Apple. Critics had already started discussing if the brand could live up to the success it had seen in other markets. Many had even predicted that its premium smartphone models would cut no ice with Indian consumers who have a plethora of local brands to choose from. Will Apple be able to convince the price sensitive consumer to loosen her purse strings? Was it just a play of colours or was it something spectacular that the company try to wow the Indian consumer with?

It was amidst all these questions that the company launched the two models. Here's what happened at least in one of the major malls in south Delhi: More than 500 people stood outside the special "by invitation only" Apple event, waiting to buy their coveted smartphone. While the counters (at least at this south Delhi mall) were to open at 5.00 pm, people started queueing up from the early morning hours. Within 15 minutes of the counter opening the iPhone 5s (gold) was sold out. (For the record, the iPhone 5s is priced between Rs 53,500 and Rs 71,500 while the iPhone 5c is priced between Rs 41,900 (16 GB) and Rs 53,500 (32 GB).) Immediate pre-bookings at many retail outlets were in excess of 300-400 units, according to experts.

Akhilesh Tutleja, partner and national head, IT advisory, KPMG, says Apple owes the success to strategies specifically crafted for the Indian market. "For the first time two products were simultaneously launched by the company. It didn't junk the iPhone 4. The exposure in the media was tremendous. For the first time, Apple explored marketing tactics like offering EMIs on its phones or bundling with telecom operators and distributors," he says. Interestingly, iPhone 5s's upfront cost was reduced when it was launched with Reliance Communications.

The company didn't openly announce discounts but offered buyback options. By limiting supply the company was able make them aspirational buys. As per industry estimates, 30,000 units of the iPhone 5s and the 5c models were distributed in India during its launch in November, 2013. Of the roughly 6,000 units of iPhone5s put on the shelves, only 200 units sported the much touted gold colour. Apple's iPhone shipments to India were six-seven lakh units during 2012-13 compared with four lakh units in 2011-12.

WHERE IT STANDS
Launch budget:
Rs 30 crore
Sales: 30,000 units
(November, 2013)
WHAT WORKED
Well-planned pre-launch marketing
Bundling options with telecom operators and distributors
Attractive payment options