Subject category:
Strategy and General Management
Published by:
Ivey Publishing
Version: 2018-08-30
Revision date: 17-Sep-2018
Length: 17 pages
Data source: Published sources
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Abstract
In September 2016, Apple prepared to launch a new version of its flagship product, the iPhone 7. The new product, termed 'the best, most advanced iPhone ever,' was priced at three times its cost in the US market. However, Apple had witnessed an 18 per cent year-on-year dip in iPhone revenues in the first calendar quarter of 2016, dragging down Apple's revenues for the first time in 13 years. The leader in the smartphone market was ousted from its number one position in fiscal year 2016 by the Samsung Group, which had a 20.5 per cent market share. A multitude of factors had caused a dip in the sales of iPhones in the United States and China-Apple's key markets. Apple was now eyeing India, the third-largest smartphone market in the world, to replicate its China growth story. The India launch of the iPhone 7 was planned for October 7, 2016. The base model was priced at the equivalent of over USD900, about 39 per cent higher than the US phone price. Did Apple have the pricing power to charge more than three times the cost of the iPhone in the Indian market? What would be Apple's best pricing strategy in a market like India? How could Apple grow its revenues and profits in one of the fastest-growing smartphone markets in the world?
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Abstract
In September 2016, Apple prepared to launch a new version of its flagship product, the iPhone 7. The new product, termed 'the best, most advanced iPhone ever,' was priced at three times its cost in the US market. However, Apple had witnessed an 18 per cent year-on-year dip in iPhone revenues in the first calendar quarter of 2016, dragging down Apple's revenues for the first time in 13 years. The leader in the smartphone market was ousted from its number one position in fiscal year 2016 by the Samsung Group, which had a 20.5 per cent market share. A multitude of factors had caused a dip in the sales of iPhones in the United States and China-Apple's key markets. Apple was now eyeing India, the third-largest smartphone market in the world, to replicate its China growth story. The India launch of the iPhone 7 was planned for October 7, 2016. The base model was priced at the equivalent of over USD900, about 39 per cent higher than the US phone price. Did Apple have the pricing power to charge more than three times the cost of the iPhone in the Indian market? What would be Apple's best pricing strategy in a market like India? How could Apple grow its revenues and profits in one of the fastest-growing smartphone markets in the world?