Apple dips a toe in the market share waters by resuming iPhone 4 production for emerging markets

“The iPhone’s market share tells the tale of the two Apples perfectly. In the U.S, Apple’s smartphone reached an all-time high of 41.8% of all smartphone users in December, according to ComScore,” Mark Rogowsky writes for Forbes. “It has been rising consistently for years for now and observers like Asymco’s Horace Dediu think it will max out at 68% here.”

“In emerging markets, however, it’s a different story,” Rogowsky writes. “With lower incomes, the expensive iPhone — which runs north of $600 without a subsidy and sometimes much higher — is simply out of reach for hundreds of millions of mobile customers. In an explicit move to address that, Apple is resuming production of the discontinued, 3-year-old iPhone 4 for India, Indonesia and Brazil only, per a report in The Economic Times.”

“The iPhone 5s stars at 56,500 rupees, about $850, in India. The cheapest model that had been in the lineup was the iPhone 4S, which goes for 26,500 rupees ($425) “under exchange,” or with a trade in of another phone, the Times reports. The iPhone 4 now clocks in at 20,000 rupees ($320) and it’s likely that trade-ins will lower that further in at least some cases,” Rogowsky writes. “The reason this is significant is that it breaks tradition for Apple. The cheapest no-contract, new iPhone in the U.S. is the iPhone 4S, which is hard to find for less than $450, although one can do better with a trade-in. It’s not a fundamental shift in strategy for Apple, but more one of tactics.”

Read more in the full article here.

29 Comments

  1. It would have been cheaper for Apple to sell the existing iPhone 4S to the Indian market for another $150 discount than to run up a separate production line and A4 CPU. The A5 CPU that is used in the 4S is also used in the iPod touch line so the cost is absorbed over a higher number of production units.

    Of course this will not have occurred to Tim Cook who is intent on squeezing every last penny from dead tech. That’s what he’s good at – not pushing the boundaries forward but squeezing the last penny out of Apple consumers.

    1. So, putting a 64 bit chip and upgrading iOS to 64 bit in both the latest iPhone and iPad is not pushing the boundaries? That’s desktop class hardware in your hand! And it will be a couple of years before Android is able to catch up.

  2. It could be an issue of differentiation. Offering the 4 at a lower cost has precedent, lowering the price of an existing phone without an introduction of a new one is really rare (I think Apple did it once early on with the iPhone 3G). If Apple moves the price of the 4S, what does that say to other markets?

  3. They should offer a gray 5C with lower capacity at a dramatically lower price for developing markets. Would this really be so difficult or expensive for their bottom line? People who can afford it would want a higher capacity model, so it doesn’t conflict with their current markets. But offering a slow-as-hell 4 does not help for the customer experience or their brand. When that 4 user sees a similarly priced, much faster Android knockoff with a bigger screen, they’ll switch to that, not stay in the same Apple ecosystem.

    1. If this makes any sense to you, please share your thoughts so the rest of us might understand. I know a lot of people in those countries still drive around in old 60’s Volkwagen Beetles but I’m sure even they’re smart enough to buy a modern Android smartphone instead of a discontinued iPhone. Physically, the iPhone 4 is definitely high-quality but that old processor would be wheezing trying to run iOS 7. Tim Cook is going overboard if he’s merely trying to cut costs.

      1. Funny, my iP4, running iOS 7, is just fine, in fact I use it every day, alongside my iP5.
        But there are many on here who would deny that it’s possible for me to even use it.
        I’m sure there are millions of people who will be perfectly happy to use a beautifully solid device like an iP4 rather than some cheap, shonky piece of plastic generic Asian phones running some variant of Android.

    2. So you are saying that Apple won’t try to get the lower priced phone segment of the market? Are you saying that Apple isn’t concerned about market share? Other than criticizing people in general you don’t take a stand either way.

            1. Are you insulted by having it pointed out that the people posting on this site are not in charge of Apple? As well meaning as these posters are, Apple has got to where they are by not taking this source of great knowledge and wisdom seriously.

  4. I can’t even wrap my head around this move because it breaks every smartphone industry rule there is. Apple is already a hated company because it’s said they’re not designing cutting-edge smartphones. Now Apple is going to start reselling nearly four-year old, discontinued iPhones to save on manufacturing costs? This is some strategy I can’t even begin to fathom. How do small companies like Xiaomi manage to sell nearly cutting edge smartphones with big displays for $150 and yet super-wealthy Apple can only afford to resell an ancient smartphone and still charge more. I’d figure Apple would have to at least upgrade the processor to run iOS 7.

  5. This is a smart move, the iPhone 4 is the first iPhone to run iOS 7 and remember the A4 is also in the iPad 1. I still use my iPad 1 all the time. It does a lot- you can’t edit videos with it, but it is very capable. With the Apple “buy back” program, in two years customers in India, ect could be fully in Apple’s ecosystem.

    Gross business will go up with this one as will profits in dollars but margins will slightly go down. But long term to have 50-100 million more people in the ecosystem will pay off for years to come. And don’t forget the halo effect with Mac sales.

  6. And iOS maintenance. Future upgrades are for 64-bit processing. iPhone 4 is 32-bit. So they will use it to build the people into the ecosystem then keep them on an upgrade cycle of 4-generation-old phones. Will they make money?

  7. I’m starting to think this was the point of the 5c all along. Will they be able to sell the 5c for cheaper when it’s three years old than they can price the 4 at now? If they came out with a plastic iPhone 4 now, they’d have all new kinds of design and manufacturing to invest in in order to sell a three year old phone. Might make more sense to do that with a one year old phone, and just pass it down.

  8. I’m a proud owner of an Iphone4 but now, after almost 5 years, it feels like outdated hardware. My kid just bougth a small less than 200 samsung that it’s a lot lot faster. $320 for an iPhone 4?! Come on Apple, you can do better than that. iPhone 5C it’s just a glimpse of how lousy apple pricing can be.

  9. Maybe Apple had enough unsold iPhone 4’s in inventory, plus a enough existing parts to make some more, to produce an inventory of few million total. I can’t see Apple going into full production on the iPhone 4 again.

    They only have to last until mid-year (or whenever the next iPhone lineup is released). Apple can plan to continue production of the iPhone 4s for the “emerging markets.” The 4s has an A5, which is dual core and a significant improvement over the A4 for running the latest iOS and apps. Apple can even put it into a colorful plastic case and sell it as the “iPhone 4c.”

  10. How many iPhone 4 is apple hoping to sell it will not be in millions like their newer line of iPhones. Apple should stick to their plan of selling the best instead of chasing market share. iPhone is past its best by apple standards. Cant understand Apple strategy right now.

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