Desperate times call for desperate measures and both Apple and OnePlus have responded to the global lockdown by launching smartphones that could lure buyers due to their pricing. However, the surprise element is that the actual price difference between the new iPhone SE and the OnePlus 8 is just Rs.500 in India.
What made this pricing strategy possible? Some years ago one couldn’t dream of owning an iPhone at a price point that was anywhere close to that of a flagship iPhone model. How is it that two of the bestselling phones across the world are suddenly priced so close to each other?
Blame it on a strategic shift that both companies are undertaking in parallel. Apple appears to be targeting a broader segment of the smartphone market with its $399 iPhone SE while BBK Electronics, which owns the OnePlus brand, seems to be going after the premium buyers with a range that starts at $699.
OnePlus looks to narrow things down
An immediate indicator of how OnePlus is reworking its strategy is visible from the price bump that the OnePlus 8 and the OnePlus 8 Plus received compared to the previous models. While the OnePlus 8 starts at Rs.41,999 and the OnePlus 8 Pro costs Rs. 54,999 for the base variant, the OnePlus 7 and its Pro versions were priced at Rs.32,999 and Rs.48,999 respectively.
The latest flagships from the OnePlus stables are anything but affordable even from a global pricing standpoint. They start at $699 (OnePlus 8) and $899 (OnePlus 8 Plus) in the US market that the company had desperately targeted in the past. Of course, higher costs of the Snapdragon 865 processor and the 5G modem contributes to the price hike, but the fact remains that the company has upped the with its design features and specs.
The problem is would OnePlus owners be willing to shell out close to Rs.10,000 for an upgrade? Or would they rather stick on with the OnePlus 7 which has received a price cut already or any of the previous models for now? And, if they do want an upgrade, what would stop them from warming up towards the iPhone SE ? Also, rumours around the budget variant of the OnePlus 8, which may be released as the OnePlus Z, may also create doubts in a buyer's mind.
While it is true that the OnePlus 8 has competitive design and specs advantage, users may find the Apple ecosystem more lucrative as iPhone prices move southward.
Apple plans to broaden its base
Which brings us to the strategy that Apple appears to have charted under Tim Cook. Today there are iPhones for different consumer segments and price points, suggesting that the company has slowly widened its portfolio to appeal to a broader audience, specifically those who found the costs to be a barrier in the past. The fact that the iPhone SE became significantly cheaper in India cannot be a coincidence.
Known for pricing their products at a premium level in the past, Apple has plonked the iPhone SE right into the centre of the mid-range smartphones that includes even flagships. Quite obviously the $399 targets those who haven’t yet joined the Apple ecosystem because they found both the iPhone XR and the iPhone 11 priced snootily.
Which is why the iPhone SE seems to be just the right option for those who refrained from upgrading beyond the iPhone 6 and the iPhone 6S. Spending Rs.42,500 for the iPhone SE wouldn’t appear to be extravagance, even in these unprecedented times. The clear strategy from Apple seems to target the lower end of the spectrum in many mature markets where the iPhone remains an aspiration but is beyond their reach.
What’s more, those who upgrade from earlier iPhone models (those preceding the iPhone 8) wouldn’t find drastic tweaks to the design, look and feel. The screen size remains 4.7-inches and there is a physical home button with fingerprint scanner. The huge upgrade comes from the A13 Bionic chip, which is the same one residing under the iPhone 11’s hood. Of course, there’s also wireless charging and a dual SIM, both of which would be killer upgrades.
By getting the basics right, Tim Cook is ensuring that Apple keeps its loyal customers while luring some Android users into its ecosystem and creating more traction for its services such as Apple TV+, Apple Arcade and the App Store, thus preserving its growth without actually having to let go any part of its revenues. And things could get better or Indian users, should Apple consider assembly or manufacturing the iPhone SE in India, just as it did with its predecessor.
For now though, OnePlus 8 appears to be in the safe zone as there is every likelihood that committed customers will stay loyal, especially if one is looking to upgrade from a OnePlus 6 or earlier. The chances of their shifting allegiance to an iPhone SE is remote, unless of course they had been continuously seeking to enter the Apple ecosystem in the past.
The short-term may be secure, but in the months ahead, there is no denying the fact that OnePlus could come up with a cheaper phone to get back any market share that it may lose due to the current pricing that brought the iPhone SE and the OnePlus 8 within striking distance of each other.
Suffice to say that this is the first time OnePlus facing the heat from the iPhone, a brand that it has emulated in design and UX. Would it continue to face bigger challenges with the launch of the iPhone 12 is something that we need to wait and watch.