On Wednesday, Apple introduced the iPhone 16e, which will take the place of both the iPhone SE and iPhone 14 in its product lineup. This new device is the most affordable option within the iPhone 16 series and is targeted at emerging markets like India.
India, the world’s second largest smartphone market after China, has been a significant driver of iPhone sales, with Apple recently breaking into the top five vendors within the country. However, with just a week to go before the iPhone 16e’s launch, the device’s effect on this crucial market remains uncertain.
In 2024, India emerged as Apple’s fourth largest market, following the U.S., China, and Japan, achieving a remarkable 12 million shipments in a single quarter, and experiencing a year-over-year growth of 35%, according to IDC. Expectations are high, with projections suggesting a rise beyond 15 million units this year.
Interestingly, Apple’s success in the South Asian market did not stem from the iPhone SE or iPhone 14, but rather from the iPhone 15 and the iPhone 13, which collectively contributed to a 6% share of the overall smartphone market in Q4.
As Apple grew in India, the iPhone SE’s share in the market witnessed a significant decline. The iPhone SE (2020) accounted for 18% of total iPhone shipments during its debut year, but this fell to just 6% for the iPhone SE (2022) two years later, according to IDC data provided exclusively to TechCrunch. In comparison, the iPhone 13 held nearly 40% of iPhone shipments in 2022.
IDC reports indicate that shipments of the iPhone SE in India and globally dwindled to almost negligible levels in 2023 and 2024, with neither year featuring a new release of the SE model.
According to Navkendar Singh, associate vice president at IDC India, approximately two-thirds of iPhone sales in India are derived from older model generations.
In an arena dominated by Android devices, where the average smartphone costs around $259, brands such as Vivo, Oppo, and Xiaomi have made considerable progress. Nonetheless, the iPhone continues to lead the $600+ market segment, followed closely by Samsung Galaxy devices. Consequently, Apple’s most significant competition arises from its own lineup of iPhones.
Prices for the iPhone 16e begin at 59,900 Indian rupees (~$689) and can rise to $1,034. In contrast, the previous iPhone 15 starts at $804, while the iPhone 16 is priced at $919.
In a market like India, where older models still sell well, the price gap may not be sufficient to convince customers to select the iPhone 16e over the iPhone 15, especially considering the features that the budget model lacks.
Any new features introduced with the 16e may not be compelling enough to draw in new customers, particularly given the popularity of equated monthly installment (EMI) schemes, which allow buyers to acquire high-priced items through installment payments. Nearly half of those purchasing premium smartphones in India priced between $400-700 choose to finance their purchases this way.
“With EMI options, the real price difference may lead many to prefer the iPhone 15 or 16 over the iPhone 16e,” stated Singh.
With the launch of the iPhone 16e, Apple is venturing into a more budget-friendly bracket, which could ultimately boost its revenue through Apple Services over time. However, the rollout of Apple Intelligence, still in its early stages in the U.S., will not reach India until April.
The iPhone 16e marks Apple’s latest foray into local assembly in India, joining the ranks of the other iPhone 16 models. Nonetheless, this local production is not anticipated to influence pricing in the short term.
Sanyam Chaurasia, a senior analyst at Canalys, believes that the iPhone 16e could appeal to customers considering an iPhone 12 or 13—devices that remain available through retail channels in India.
He also pointed out that younger consumers might gravitate toward the iPhone 16e instead of the older iPhone 15. “It caters to a specific market segment,” Chaurasia noted.
Unlike other emerging territories such as Latin America and Southeast Asia, India’s smartphone market lacks telco subsidies, making the iPhone 16e a comparatively costly choice for local consumers.
Additionally, the timing of the iPhone 16e’s release may diminish its appeal, as this period does not coincide with upgrade seasons, which typically align with significant Indian festivals later in the year, as Chaurasia indicated.
“Apple may offer discounts on the iPhone 16e during the celebratory season later this year, yet similar promotions on existing iPhone models will likely make them more enticing than this new offering,” he concluded.
Compiled by Techarena.au.
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