New study compares iPhone 7 prices

• Indonesia and Thailand are the most expensive
• Loyal Apple customers boost sales in Indonesia

THE announcement of Apple’s new iPhone 7 last month sparked excitement for the fans waiting for the product to be sold in their respective countries.
 
“I looked up the links to be able to watch the Apple Keynote last month, I always follow the news around the new iPhone 7, saving my money for the past six months, hopefully I will be able to purchase it in Singapore next month,” a 26 year old business analyst, Idham Khalil told Digital News Asia.
 
In Singapore, the price for the iPhone 7 with 128 gigabytes of memory is S$1,218 (Rp11.5million) and iPhone 7 Plus with same memory capacity is S$1,418 (Rp13.4 million).
 
His friend, an administration officer Putri Nurmalasari, takes a bit more sceptical approach, saying that Apple products sell dreams to many, but in the end only a few can afford.
 
“I will not fly anywhere to get an iPhone. If it comes to Indonesia, and if one credit card company gives zero percent instalment or any good promotion program, then there is hope for me. Otherwise, I will just stay with my mid-range Android phones,” she said. “Or settle for the previous iPhone model, such as the iPhone 5S. It is now on promo, maybe I should try to trade-in my old phones with that,” she continued.
 
Both Idham and Putri earn less than Rp8 million (US$615) per month as their salary and have no other incomes. Idham has been saving on average Rp2 million (US$153) per month for the past six months to fulfil his iPhone 7 aspirations.
 
“Every one needs aspirations right? Mine is the iPhone. And for me, buying from Singapore is cheaper and faster than waiting for the product to reach the local stores,” Idham added.

 

According to a recent study, the iPhone 7 128GB will reach Indonesia with a hefty price tag of US$1,268 (Rp16.5 million), or 43 percent more expensive compared to the product price in Singapore.
 
This is due mainly to the high  import costs as well as the taxes imposed by local government.
 
The iPhone 7 price in Indonesia is equivalent to the price of buying a new Honda motorcycle or three months apartment rent in Central Jakarta or 32 sacks of 50 kilograms of rice, which is enough to sustain an Indonesian for 16 years.
 
With the average salary of US$1.8 per hour, a middle class Indonesian on average needs to work for 87 days or nearly three months to afford the iPhone 7 - assuming all the salary will go to buying the iPhone 7.
 
For comparison, it takes seven work days for Singaporeans, 24 work days for Malaysians and 69 work days for a Thai.
 
As the iPrice study emphasised, the iPhone is a status symbol in Indonesia.  The iPrice study also reported that Singapore and Hong Kong are the two Asian countries which get to sell the newest Apple products including the new iPhone 7 before any other country in the region.
 
The study highlighted that people in countries such as Thailand, Vietnam, Indonesia, Malaysia and Philippines, tend to set aside time to go to either Singapore or Hong Kong to buy those products at a much cheaper price.
 
Even unauthorised retailers are taking advantage of the situation, selling the iPhones back in their home markets at higher prices which can go up by 14 percent in Vietnam and 49 percent in Thailand.
 
As of today, even Apple’s previous iPhones, the iPhone 6s, iPhone 6s Plus and iPhone SE are not available yet in Indonesian authorised stores.
 
As International Data Corporation (IDC) Indonesia’s senior market analyst for client devices, Reza Haryo (pic) told DNA, iPhone demand in the country is largely driven by loyal Apple customers.
 
“The loyal customers are still behind most of the demand and also some buyers who just shifted from high-end Android devices. In terms of shipment volume, Apple’s numbers are considered small compared to big vendors such as Samsung, Oppo, Asus, and Lenovo,” he told DNA.
 
Recent Quarterly Mobile Phone Tracker report from IDC Indonesia suggested that Samsung maintains its leadership in the market with 26 percent of market share, followed by Oppo with 19 percent, Asus with 9 percent and local brand Advan has 8 percent.
 
Reza mentioned that Apple’s market share in Indonesia is tiny at around two percent in the second quarter of the year. There were a total of 29.3 million smartphones shipped in Indonesia last year.
 
“In more mature market such as China, Australia, New Zealand and Singapore, Apple has a very strong brand that can command the industry. That is why the company is expanding its channel to fuel its growth in the coming years. In Indonesia, entry level fourth generation (4G) devices will remain the sweet spot for all the vendors,” he explained.
 
However, as more Indonesian consumers settle into the connected lifestyle, there is hope for the iPhone 7 to compete in the high-end smartphone market.
 
“Many Indonesian customers are chasing good camera quality. It is the third consideration after price and brand, Therefore with a good brand and good camera, the iPhone 7 might have bigger chance to compete in the market compared to its previous models,” he added.
 
 
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