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Will Apple’s iPhone SE Capture Market Share in India?

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Market penetration in India

Apple (AAPL) is looking to increase its penetration and market share in emerging markets such as India (INDA), where it accounts for less than 2% of the overall smartphone market. Although the iPhone is considered to be a niche product in most developing countries, the recently launched iPhone SE could attract users due to its competitive pricing.

According to a report from the International Data Corporation, Korean (EWY) smartphone manufacturer Samsung (SSNLF) continues to lead the smartphone segment in India with a 24% market share. Samsung is followed by domestic players Micromax and Intex with market shares of 16.7% and 10.8%, respectively. China’s (FXI) Lenovo (LNVGY) has a market share of 9.5% in India.

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Is the iPhone SE cheap enough?

According to analysts, the iPhone SE may not be cheap enough to penetrate Indian markets. The latest iPhone is the same cost as the iPhone 5S in India. According to IDC, the iPhone 5S accounted for 40% of total iPhone sales in India for 2015. Price is one of the most important considerations for consumers in India.

The percentage of Indians who own a four-inch smartphone is also decreasing YoY (year-over-year) as the smartphone is a device used as a substitute for a laptop. Users thus prefer phones with larger screen sizes at a reasonable price. “It’s not that Indians want smaller phones, they want cheaper iPhones,” said Kiranjeet Kaur, an analyst at IDC.

Despite the price cut for the iPhone SE, the product is still out of reach for most customers. Neil Shah, who heads the research at Counterpoint Research, said that the iPhone SE price is “3% of the total volume in India.”

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