Should Apple Inc (NASDAQ:AAPL) continue to ignore the low-end smartphone market?


Apple (NASDAQ:AAPL)’s iPhone 6 mania is just a few days old but its strategies and plans were built a year ago. Apple Inc (NASDAQ:AAPL) had studied the market before opting to create the sequel in the iPhone line. 2012 was a booming year for the smartphone business, with the growth rate going up from 494 million units to 722 million units a year. The 70 percent gain came from the market of phones lower than 300 dollars; the 30 percent came from high-end phones that had 4.0 inches or bigger screen.

It was clear enough that the market for high-end phones is somewhat shrinking. Surely Apple Inc (NASDAQ:AAPL) made good sales with iPhone 6 but it will face challenges; it remains to be seen if this early buzz in the market will last longer. Apple Inc (NASDAQ:AAPL) has grown 13 percent as compared to last year sales, but that is only one third of the full 38 percent growth of the market.

iPhone has become Apple (NASDAQ:AAPL)’s flagship device that makes the most sales for the company – the expected figure for this fiscal year is expected to be around $180B. Apple (NASDAQ:AAPL)’s cheapest phone costs about $450, which is not a figure for customers who go to low-end markets for their smartphones.

Google Inc (NASDAQ:GOOGL) has ventured into the lower- end phones with Android One, which was indeed a smart move on the company’s part. Apple Inc (NASDAQ:AAPL) on the other hand is still dealing with the premium market; this means that it is missing out on the 70 percent of growth and is betting on the remaining 30 percent. Apple Inc (NASDAQ:AAPL) has its work cut out because it cannot afford to lose that part of its premium market, which already has a few high profile competitors such as Samsung.

Apple Inc (NASDAQ:AAPL) has big competitors in the premium market. Samsung is already geared up with Note 4 and then again other companies like HTC and Sony have some great phones lined up – all set to challenge iPhone, simply because Apple Inc (NASDAQ:AAPL) is on top of the food chain.

Now here’s the thing! When a customer can get specifications almost as good as Apple (NASDAQ:AAPL)’s for a price of about $200 with the latest Android installed, then why won’t they go for the deal, why would they spend more money on something more expensive, but not necessarily better. The point here is that Apple Inc (NASDAQ:AAPL) is too expensive and there are many options to replace it. Apple Inc (NASDAQ:AAPL) has to eliminate that threat and maybe consider the low-end market in the future.

There are tons of websites with ’10 best androids’ list, the top of which will probably have the Nexus phones. Apple (NASDAQ:AAPL) must acknowledge the fact that it’s taking a huge risk by sticking to the premium market and missing out on the lower-end part of it. It can never be a smart move to ignore a market segment that is dominant and continue to cater to a certain segment. Change is the name of the game; every company that fails to grasp the concept will suffer in the long run.