SINGAPORE/CUPERTINO – Apple has reduced the price of its latest entry-level iPhone, and unveiled new video streaming and game subscription services priced to undercut its rivals.
The US$699 new iPhone 11 – which will be US$50 cheaper than the older iPhone XR it is replacing – and the slew of inexpensive content are part of plans to regain handset market share and lock customers into its ecosystem.
Apple unveiled its top products for the year ahead on Tuesday (Sept 10) at its biggest marketing event held at Steve Jobs Theatre in Cupertino, California.
Its high-end phones – the iPhone 11 Pro and Pro Max, which now feature a rear triple-camera system – will still start at US$999 and US$1,099 respectively.
In Singapore, the iPhone 11 and the “Pro” models will go for a starting price of S$1,149, S$1,649 and S$1,799, respectively.
Over the past three years, unit sales of the iPhone globally have been almost flat as users resisted upgrading to ever more expensive models. But the new pricing strategy for the entry-level model may invigorate the market, said analysts.
“There are a lot of people on iPhone 6 to 7, and this is probably to provide them (with) a cost-effective option to upgrade,” said market research firm IDC Asia-Pacific research manager Kiranjeet Kaur.
The move is also seen by some as a way to regain market share lost to China firm Huawei.
Apple and Huawei had tied as the world’s No. 2 smartphone brand in the first half of last year, each with a 14 per cent market share, according to IDC.
But Apple’s share slipped to 11 per cent in the first six months of this year, trailing behind Samsung (23 per cent) and Huawei (18 per cent), according to IDC global shipment numbers.
“The new price strategy will drive iPhone shipment up,” said Mr Jusy Hong, British firm IHS Markit’s research and analysis director for smartphone.
With the ongoing US-China trade war, Apple could face tariffs of up to 30 per cent on Apple products imported into the United States from China later this year.
IDC’s Ms Kaur said: “Even so, there has not been any indication that the extra cost would be passed on to the consumer.”
On Tuesday, Apple also unveiled the price for its video streaming service Apple TV+, marking its entry into a crowded space dominated by Netflix.
Apple TV+, which will initially carry nine original shows, will launch on Nov 1 in more than 100 markets, including Singapore, for a monthly fee of US$4.99 (S$6.98).
The shows include For All Mankind, The Morning Show, Dickinson and the animated Snoopy In Space.
Hollywood A-listers, including Steven Spielberg, Reese Witherspoon and Oprah Winfrey, have been drafted to produce or act in these original shows.
All purchases of new iPhones, iPads and Apple TVs will come with a one-year free subscription to Apple TV+.
Comparatively, Netflix’s basic plan goes for S$10.98 a month in Singapore.
Rival Walt Disney also plans to launch a US$7-per-month service that will contain its iconic children’s content in November in the US, Canada, the Netherlands, Australia and New Zealand. It is not known when Singapore subscribers can tune in.
Mr Francisco Jeronimo, associate vice-president of devices at IDC’s Europe, the Middle East and Africa division, is not surprised that Apple is using price as a strategy to expand and protect its connected ecosystem.
“In this new challenging environment, growing the services and content propositions is vital,” he said.
The Apple Arcade video game subscription service will be available on Sept 19 in more than 100 markets, including Singapore, for S$6.98 a month.
Comparatively, Google’s upcoming game streaming platform Stadia, which is slated to launch in November in the US, United Kingdom, Europe and Canada, will cost US$9.99 a month.
Unlike, Google Stadia, Apple Arcade will require subscribers to download and play games offline.
Apple will offer more than 100 games for starters, including cyberpunk science-fiction point-and-click adventure game Beyond A Steel Sky, brick-based multi-player battle game Lego Brawls, and role-playing action game Oceanhorn 2: Knights Of The Lost Realm.
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