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Why Apple launches new iPhones – a cycle of hype

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iPhone is still very expensive for the average Indian user. But Apple will win even if it manages to become the dominant player in the luxury segment, which now has very few smartphone makers left.

At Apple Park Campus here in California, at the world’s most hyped annual tech media event, Apple on Tuesday announced three new iPhones, a new Apple Watch and a new iPad. There were no big surprises — even though the slightly lower pricing of the iPhone 11 base model, and the aggressive monthly subscription rates of new services Arcade and Apple TV+ got some applause.

Why does Apple launch new phones every year in September?

Apple is different from other smartphone makers — it has, at least in countries like the United States and Australia, a captive base of users who don’t actually put a lot of money down to buy a new iPhone; rather, they pay for it as part of their monthly telephone bill. It is almost like a subscription service — every time they get a new iPhone, their monthly bill goes up by a few dollars. These users — whose numbers are substantial — end up periodically upgrading to newer devices, thus assuring Apple a certain sales volume every quarter.

How is the global smartphone market doing right now?

Over the past few quarters, it’s been flat at best. According to research firm Canalys, shipments for Q2 2019 actually fell 2% year on year. Samsung and Huawei, which hold the top two spots, grew in single digits; Apple, in the third spot, saw its numbers fall 13%. Apple will be hoping to recover in Q3, which, because of the new launches, is traditionally its best quarter. Chinese startups like Xiaomi, Oppo, and Vivo having been dominating the budget phone markets.

How important is India for Apple?

Over the past few quarters, Apple has lost its way in China, its biggest growth market. This is why it will turn focus on to India, where it is already manufacturing iPhones. Buoyed by the success of the iPhone XR after a price cut, Apple has launched its successor, the iPhone 11, at Rs 64,900, much below the Rs 76,900 launch price of the XR. It has also been pushing cashbacks via banking partners, EMI schemes, and other offers that make the phone cheaper.

But even so, an iPhone is still very expensive for the average Indian user. But Apple will win even if it manages to become the dominant player in the luxury segment, which now has very few smartphone makers left.

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