A decade after the iconic handset was born, it is finally being made in India
By Anand Parthasarathy
Bangalore, June 27 2017: On June 29 2007, Apple hitherto best known for the Macintosh desktop series and the iPod music player launched a mobile phone -- like no other handset then available. It was best described as a touch-screen minicomputer that incorporated a digital music player, email, maps and web browsing. Other contemporary phones from players like market leader Nokia had better cameras, more memory -- but Apple CEO Steve Jobs homed in on the one feature that would capture the customer's loyalty -- touch.
The first iPhone had a 3.5 inch screen, 128 MB of RAM and 4,8 or 16 GB of storage and a 2 megapixel camera. The cheapest ( 4GB) version cost $499 -- an audaciously high price point for a new comer. But Jobs new the business: the iPhone was and always remained a pricey but desirable product -- and buyers were happy to pay the premium over similar-specification rivals What they got was superior design and ergonomics, with a sharp eye for style and comfort.
A year later came the first 3G iPhone. By 2012, the storage had increased to 64 GB. Since then there have been small incremental changes and tweaks. In the seventh iteration, iPhone 7, the storage had grown 64 times to reach 256 GB. The screen was a full HD 5.5 in the iPhone 7 plus and still 4.7 inch in the basic iPhone7 -- at a time when phones had become phablets with near-7 inch screens. But iPhones were not about competition on size, it was about class -- and a certain snobbishness. The iPhone was for flaunting: It delivered a message: "I go for the best -- and I can afford it!": The price range of the iPhone 7 and 7 Plus was from Rs 60,000 to Rs 92,000.
iPhone and India: The story of the iPhone and India is not a happy one. Apple never included India in the first rung of countries for launch of a new iPhone. For much of its first decade, it never had a serious distribution network outside the metros. The price of an iPhone in India was significantly higher than its international dollar price -- and could not always be explained away by the prevalent import duties. In his lifetime Jobs ( who had visited India in his youth and seemingly took back some negative impressions) never took the India market seriously. For some years after his death in 2011, it looked like being a case of 'his master's voice' for successor Tim Cook. But the last year or two has seen some attitudinal changes with respect to India.
Finally, after his first visit to India in May 2016 and his meeting with Prime Minister Narendra Modi, Apple decided to "make in India". It has still not completed its engagement with the Indian government to extract the best terms to set up manufacturing here. But that has not stopped Apple from making a start with Taiwan-headquartered contract manufacturer Wistron to assemble the low end 4 inch iPhone SE in the latter's Bangalore plant. The first few units bearing the legend "Designed by Apple in California, Assembled in India” have reached shops -- but they are said to be not cheaper than the original made-in-China iPhone SEs which sold for around Rs 22,000 - Rs 24,000.
So it is not clear whether Apple will pass on the benefits of making locally to Indian customers -- or whether it will seek to maintain its premium pricing, only satisfying the Indian government's agenda to see more global brands make in India.
As the iPhone enters its seconds decade, it is facing some market pressure for the first time. It still sold 212 million phones in the last fiscal year -- but that reflected a shrinking market for the first time in its history. It's share of the global smart phone market remains at some 13% with Android accounting for nearly 87 %.
Perhaps it has come to India at the right time.... the last big global market for mobile phones. Analysts Cyber Media Research reported last month that Apple iPhone 5S is the no. 1 premium smartphone in India across all the states as of March 2017. The latest handset from Apple, iPhone 7 is ranked at No 4 in some of the states.
With its Apple DNA, the new iPhone 8 due later this year, can be expected to break the mold as it has done for a decade. Market rumours suggest new features might include wireless charging and the absence of a 'home button'.
As the world gears for the zippier 5G environment from 2020, who knows what form the smart phone will take -- or even whether tomorrow's personal connected device will be a phone -- or something radically different? At Apple you can be sure, they are already thinking about this -- and how to retain their special brand in the new connected world.