Latest entry-level iPhone is cheaper than previous model

Apple chief executive Tim Cook presenting the new iPhone 11 on Tuesday at the company's marketing event, held at the Steve Jobs Theatre in Cupertino, California. PHOTO: REUTERS
Apple chief executive Tim Cook presenting the new iPhone 11 on Tuesday at the company's marketing event, held at the Steve Jobs Theatre in Cupertino, California. PHOTO: REUTERS

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 (S$964) iPhone 11 - US$50 cheaper than the older iPhone XR it is replacing - and the slew of inexpensive content are part of plans to regain market share and lock customers into its ecosystem.

Apple unveiled its products for the year ahead on Tuesday at its marketing event, held at the Steve Jobs Theatre in Cupertino, California.

Pricing for its high-end phones - the iPhone 11 Pro and Pro Max, which now feature a rear triple-camera system - will 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.

Unit sales of the iPhone globally have been almost flat over the past three years, as users resisted upgrading to increasingly costly models.

But the new pricing strategy may invigorate the market, said analysts.

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.

"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 research manager Kiranjeet Kaur of market research firm IDC Asia-Pacific.

Some see the move as a way to regain market share lost to Chinese 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 Samsung (23 per cent) and Huawei (18 per cent), according to IDC global shipment numbers.

With the trade war, Apple could face tariffs of up to 30 per cent on Apple products imported to the United States from China later this year.

Ms Kaur said there has been no indication that the extra cost will be passed on to the consumer.

On Tuesday, Apple also unveiled video streaming service Apple TV+, marking its entry into a crowded space dominated by Netflix.

Apple TV+ will initially carry nine original shows. It will launch on Nov 1 in more than 100 markets, including Singapore, at US$4.99 a month.

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.

All purchases of new iPhones, iPads and Apple TVs will come with a free one-year subscription to Apple TV+.

Netflix's basic plan costs S$10.98 a month in Singapore. Rival Walt Disney plans to launch a US$7-per-month service in November - which will contain its iconic children's content - in the US, Canada, the Netherlands, Australia and New Zealand.

The Apple Arcade video game subscription service will also be available next Thursday in more than 100 markets, including Singapore, for S$6.98 a month.

Mr Francisco Jeronimo, associate vice-president of devices at IDC's Europe, 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.

A version of this article appeared in the print edition of The Straits Times on September 12, 2019, with the headline 'Latest entry-level iPhone is cheaper than previous model'. Print Edition | Subscribe