Why Apple May Bring Its Secret Sales Weapon to India

Before Apple's (NASDAQ: AAPL  ) iPhone 5s and 5c launched, the company's secret sales weapon was the iPhone 4. The lowest priced iPhone at the time helped Apple make gains against Android when it came to first-time smartphone buyers.

If a report by the Times of India proves true, Apple may bring the iPhone 4 out of retirement to do the same thing once again, but this time in India.


Source: Apple.

Apple's premium brand needs a cheaper alternative for India's smartphone consumers, and the company's four-year-old device may just do the trick. The report says the phone would cost around 15,000 rupees, about $245. That's significantly lower than the selling price for the 5s and the 5c. Apple already sells the iPhone 4S in the country, but offering an even cheaper version could help push sales higher.

Right now Apple only holds about 1.4% market share in the country, and while Apple famously says it doesn't care about market share there are some stats Apple likely does care about.

India is one of the fastest growing smartphone and mobile markets and will overtake the US this year as the second-largest smartphone market. The country's smartphone penetration is less than 20% right now and is expected to grow its new smartphone user base by 207 million this year alone.

Apple's presence in the country has grown over the past year, with the company launching a monthly installment plan for its phones. While that's helped Apple, rival Samsung has a strong footing there, holding 33% of the smartphone market and the local vendor Micromax taking 17%.

Of course, Apple selling the iPhone 4 in India isn't a completely novel idea. The company still sells the device in China, offering high-end devices across multiple pricing tiers. Although the iPhone 4 has a few years on it, the device still runs iOS 7 and has specs that can still easily compete with lower-end Android devices. This type of premium phone for a not-so-premium price strategy may be what Apple needs to make a significant dent in India's burgeoning smartphone market.

Foolish thoughts
There are a few things for investors to take away from the iPhone 4 possibly going on sale in India. The first is obviously that Apple realizes the opportunity to tap into the exploding smartphone trend in the country is too big to pass up. Apple could have stuck to its premium brand mantra too much and simply priced themselves out of any competition. But bringing the iPhone 4 to the country would mean Apple isn't satisfied with standing around waiting for emerging markets to be able to afford more expensive devices. If Apple waits too long to introduced a cheaper phone, it could miss out on building its brand and creating life-long customers.

Along the same lines, Apple is showing investors that it's willing to try new things to keep its premium brand, while still offering cheaper alternatives. Apple dabbled in this when it released the 5c, kept the iPhone 4 for sale in China, and when it introduced monthly payment plans for the iPhone in India. The company now has more phones, at cheaper prices than they've ever been before, with more ways to pay for them and in more emerging markets. That's a great strategy as it continues pushing for growth outside of saturated markets like the US.

While it still has a lot of fighting to do to make a real impact with its India sales, Apple may be on the brink of showing us that it's no longer satisfied to see Android devices grab all of the market share in low-priced segments of emerging markets.

Stop guessing about 2014
If Apple releases the iPhone 4 in India it could be a great move for the company as the new year begins. Apple investors are hoping for bigger news this year though -- think iWatch and iPad Pro. But despite all the possibilities for Apple in 2014, The Motley Fool has chosen a different tech company as its top stock for the year, and it’s one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.


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