Should Apple compete in mid-range and budget smartphone category?

I would say — No.

My answer might seem counterintuitive but it is true.

Apple is a premium brand. It manufactures premium products in all of its businesses — Smartphones, Laptops, Accessories, etc. and know for its Quality offerings.

Recently they launched their budget smartphone — iPhone SE (2020) which costs 42K INR. Should I say this? That Apple is a premium………..

It is a common thought that “If these brands compete in a low-budget market then the budget smartphones will have good products”

But reality is quite opposite. Consider other premium brands like Samsung, Sony, LG, HTC, etc. These brands too offer premium products at a premium price.

Then, what about the mid-range or budget-range market? Do they occupy any market share?

No

But why? Is it because they don’t manufacture smartphones in mid-range or budget category?

No, right?

They don’t occupy market in mid-range or budget category because they offer specs which doesn’t match with the other players in the market but still they price it for premium. This is the case with almost every premium smartphone brand.

Let’s take Samsung. If you closely observe they offer smartphones which cost less than 10K INR and above 10K INR. A common thing in these smartphones is that they don’t offer great specs compared to their rivals (but still they have a good market share due to their marketing and Brand value, that’s for another answer).

So you see the trend.

Coming to Apple. All they offer is premium products i.e. they cost which isn’t near to others brand’s offering. As said, recently they launched a budget iPhone — iPhone SE (2020) and it is priced at 42K INR ($560).

Are you getting it? That is the least they can go. Just assume, how would be the specs of the smartphone if Apple decides to launch at a price tag of 14,000 INR. Although Apple would not do that i.e. compromise in quality and specifications.

But still if they do that, specs will not match for the price tag.

Main reasons are:

1. Premium — Apple products are priced at a very high premium price because:
2. Brand value
3. Quality — They don’t compromise in the quality of the product. They are crafted well and superior fine tuning internally and externally.
4. Profit margin — Compared to other brands, Apple’s profit margin is high……. very high. They compete in that price range category. For them competing in low-profit market is not satisfactory.

Let’s assume that Apple launched a smartphone at 14,000 INR ($180). Then the specifications would be:

1. Display — 16:9–480p or 720p (Probably not).
2. Processor — Apple A9 or A10
3. Battery — 1000–1500 mAh
4. Camera — 12MP rear and 8MP front (Not sure).

(The above specs are based on my opinion seeing their trend)

What would happen if Apple do launch a smartphone with the specs at 14K INR:

1. Sales would be as usual — 9 or 10 Millions units per week or even more.
2. Reviewers trashing Apple as they do.
3. You reading the articles like this one.
4. Me writing answers like this.

Nothing more than that. If you are expecting that Apple would disrupt the mid-range market by launching smartphones at very aggressive price. I don’t think so. I can’t even imagine that.

At last, Apple will not compete in a mid-range market. I don’t even encourage that idea.