Apple’s thousand-dollar gamble
A decade after it launched the iPhone and kickstarted a digital revolution, Apple has gone big again with its iPhone X model which touches the $1000 mark. There are likely to be two winners from this: Apple and Chinese smartphone companies.
The iPhone X will start retailing only in November, but it’s a safe bet that it will sell well. Apple’s 21st century resurgence has lent it a chutzpah that allows it to take pricing risks no other smartphone manufacturer would. At the other end of the market, Chinese manufacturers such as Huawei, Oppo and Xiaomi are closing the gap. For instance, Huawei shipped 38 million units last quarter compared with 41 million for the iPhone. The year-on-year growth is 20% and 2%, respectively. Even in the US, where the iPhone has a stranglehold, ZTE is rapidly gaining ground.
While Apple focuses on premium pricing and its budget offerings flounder—witness the iPhone SE in India—Chinese manufacturers are taking advantage globally at lower price points and showing that quantity has a quality all of its own.