this episode has been sponsored by
LastPass all right hot news story from
CNBC see any others like the verge right
there
oh yeah well covered in a couple of
places Foxconn to begin assembling top
end Apple iPhones in India in 2019 this
is significant well and the reason being
is because they want to avoid high
tariffs imported smartphones also
offering cheap smartphone parts when you
import it it's a little bit more
expensive right but if you actually have
it in-house you know all the parts there
you can just assemble it and sell it for
cheaper right so India has a unique kind
of method to encouraging tech companies
to bring a portion of their
manufacturing process to India to employ
domestic workers and as part of that
incentive they will eliminate certain
tariffs associated with bringing
complete ready to sell smartphones into
the country so this is important
specifically because Apple and iPhone
sales have kind of stagnated in India as
a consequence not just of the high price
like it is around the world but an even
higher price as a consequence of the
tariffs of the tariffs that are applied
to that already high price so an iPhone
in India it's like almost double or it's
like 2,000 bucks yeah starting price
when adjusted for the local currency and
that's that's a very expensive
smartphone for any part of the world and
especially expensive for India where the
average smartphone purchases around one
hundred and fifty bucks and they have a
lot of options as well there's a lot of
major players who have taken India very
seriously and are delivering great value
at a lower price than what Apple has
been able to do so as I understand it
Apple has been manufacturing some phones
in India to get around that tariff issue
their manufacturing I believe the iPhone
6 they started with the iPhone se S II
the six and then now they're reported to
work on the ten the iPhone 10 will now
be assembled they're making that the
most expensive most premium iPhone ever
assembled in India so they'll be
bringing the parts in but it will be
Indian workers assembling the iPhone
what this will mean is a cheaper iPhone
at the retailer for the average Indian
smartphone buyer I was looking at some
of the figures on iPhone sales in India
and previously they had shown some some
pretty substantial growth from
originally entering the market but
recently it looks like it's leveled off
slow down in terms of adoption we have a
huge audience here in the channel huge
Indian audience and I can kind of track
sort of which phones are hot and popular
in that market by looking at the
analytics on certain videos at the polka
phone remember the polka phone how hot
that very affordable affordable inside
of this marketplace is where Apple is
starting to show some of its cracks
let's say yeah
well there's a huge ecosystem for
Android and iOS you know what I mean and
once you're invested in it the chances
of you switching are very very small
yeah you get comfortable sure Apple has
no problem in the immediate future
they're selling boatloads of phones
they're making boatloads of cash that's
fine but for a company of their scale
they can't just look next year they
can't look five years ten years they
gotta have 50 hundred years down the
road right and if they're doing that
then they should also be aware and
effectively it looks like they're aware
of how important those Asian markets are
without that tariff associated you mean
the price should drop 30 40 % something
in this territory it should become
attainable for at least more of the
population I don't know how much more
that said it's not like the other
manufacturers are stopping in the
meantime as competition heats up with
the xiaomi z' and huawei's and oneplus
it's a smart clientele it's a very
tech-savvy audience in India they are
aware of things like specifications
camera sensors they're a very educated
customer in the smartphone department at
least all the people that I met I don't
think it's going to have a substantial
impact and I don't think the future is
bright for
Apple in India I don't think they
currently have a product that makes a
lot of sense for India different market
different appetite and most of the
action exists in that what would be
considered mid-range price point here
somewhere around three four hundred
dollars US or lower that's what people
are excited about and Apple has no
product in that space and the product
that should have been in that space yeah
I phone 10 R came in way higher than
that price wise now people make the
argument well it's because of the
hardware the processor and so on is the
same as the flagship that's fine it
doesn't really matter though I've been
saying this about Apple are thinking
this about Apple for a long time they've
always prioritized the Western market
fine great great for North America and
Western Europe but by not having a more
approachable product price-wise in the
rest of the world they've let other
people get a massive head start other
companies that is and who and they've
kind of priced themselves out of the
game globally globally yeah especially
in those places where people are
adopting you know their initial platform
the place where they're going to to be
now for a while
there are people today jack included
locked into the iOS ecosystem from that
original moment but they're still riding
that wave of that early innovation and
of having the best product bar none at
that point in time and by the time you
get an iPhone well you might get an iPad
as well you're in might get a MacBook
it's expensive in my opinion if Apple
wants to make a big play in India
specifically which I think they should
by the way I think it's a very important
market it's now our second-biggest
market on a channel as far as viewers
are concerned and fastest-growing people
in India love smartphones I met them in
real life they're incredibly passionate
if Apple wants a piece of that and they
should they need to come in with a $500
iPhone I don't care if it has to be
trimmed down I don't care if it
jeopardizes their premium flagship
enterprise I don't care about that
all right if I'm in there finding the
boardroom and I understand this is more
complicated than
sounds because of course Apple wants to
be perceived as a luxury brand as an
aspirational bred as a luxury brand they
want all that yeah but I don't care
anymore
smartphones are tools they're utilities
they are part of the modern toolkit
accessibility has to be there if you
want your brand to be relevant and this
is just a matter of time like I said
earlier if you zoom out far enough if
you expand your scope if you put it
across 15 years or so on you're gonna
need these new users to adopt your
ecosystem otherwise everyone else gonna
die off me and you gray hair dead and
that initial momentum that happened from
Steve Jobs and the original iPhone all
of its gonna fall up yeah that you just
can't ride that momentum forever mm-hmm
you know and it's kind of cliche
everyone constantly talks about it but
there was a huge head start their
product was so much better than any
other alternative for such a stretch of
time that they really could rest on that
mm-hmm but like let's not let's not make
any excuses here other products have
caught up and the Western mark is just
one market you know and it's a slow it's
a market that's slowing substantially
there we already talked in the past
about smartphone fatigue and how people
are pretty happy with the smartphones
they've had or that are currently in
their pocket they're upgrading them less
frequently Apple decided to stop
reporting their sales figures presumably
because they have some degree of insight
into the fact that fewer people are
prepared to upgrade to their premium
models
yes it's Apple yes it's a big
high-profile brand so these types of
reports are going to emerge but the
India this India thing is for real
otherwise Apple wouldn't have done what
they're doing if they weren't interested
or concerned about that market at all
they wouldn't take them up on this offer
to bring the portion of the
manufacturing there they care they're
tweaking their strategy I think they'll
tweak it more in the near future and
eventually they're gonna get to that
five hundred dollar iPhone that's what's
gonna have to happen this episode is
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