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Marginal iPhone 15 upgrades 'won't entice SA users to upgrade'

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 13 Sept 2023
The new iPhone 15 range.
The new iPhone 15 range.

Although Apple describes its iPhone 15 range as a “huge leap forward”, analysts believe the newly-launched phones come with marginal upgrades, which are not enough to entice local fans to upgrade to the latest device in the smartphone market.

This, after the American multinational tech company officially launched the long-awaited iPhone 15 and iPhone 15 Plus yesterday, starting at a price of $799 (R15 200).

It also unveiled the iPhone 15 Pro and Pro Max, which it bills as its most advanced phone yet, starting at $999 (R19 000).

The devices were launched along with upgraded Airpods and the latest Apple Watch, announced at a pre-recorded event at Apple’s California headquarters.

The high-end iPhone 15 devices come with an updated processor, a new design with colour-infused back glass and contoured edge, Dynamic Island, 48MP main camera and USB‑C port.

The company says its camera system, which has 5x telephoto lenses, has been significantly upgraded to enable the equivalent of seven pro lenses, with improved image quality.

The new design also features a customisable action button, allowing users to personalise their iPhone experience, says Apple.

Christopher Henschel, director at Cellucity, points out that in addition to the minor upgrades, the iPhone 15 range’s hefty price tag makes the phone out of reach for most South Africans.

“With the new iPhone 15 coming in at a price premium, the latest feature set provides a marginal upgrade and not much in the way to entice users to upgrade. Apple, in general, is far more affordable in the US market, where various interest-free payment options are available for purchasing the device on credit. We don’t expect to see a marked change in the local market share with the launch of the iPhone 15,” comments Henschel.

However, Apple devices hold their value and tech relevance for a lot longer than their Android competitors, so users who can afford it and maybe have the iPhone 12 or 13 models may consider upgrading, he adds.

“The mobile network operators also offer great trade-in options, which help to reduce the cost of ownership of the new devices, which will further drive adoption of the iPhone 15.But even with the contract subsidies, the new iPhone 15 will be on contract for around R999 per month, which is out of reach for most South Africans,” Henschel points out.

As of May, Samsung held a share of about 32% of the mobile device market in Africa, followed by Apple with 14%, according to a report by Statista. Huawei and Tecno had a market share of 10.5% and 7.9%, respectively.

In SA, Apple consistently holds second position in the premium smartphone device category, while overall, Apple ranks third in the local smartphone market, according to Cellucity.

Dr Ramazan Yavuz, senior research manager at IDC Middle East and Africa, believes the iPhone 15 series will first attract local consumers who are already in the premium segment, and are more at liberty to spend.

“Due to its price, the iPhone 15 series will help grow revenue for Apple; however, it will not result in a larger market share gain in SA. The premium segment is already tight in the African context and the 15 series will not enlarge the addressable market. However, it will indirectly help boost the sales of the older series, as the prices of 13 and 14 series will be relatively more affordable in the short- to mid-term,” he states.

According to Yavuz, among the device’s key features, the selection of materials that increases durability, easy repairability, water- and dust-resistance, and a longer-lasting battery life stand out and will likely be attractive to South Africans, in addition to the brand symbolism.

Dr Ramazan Yavuz, senior research manager at IDC Middle East and Africa.
Dr Ramazan Yavuz, senior research manager at IDC Middle East and Africa.

Henschel says while the iPhone 15 series will not necessarily improve Apple’s market share, it will result in an increase in the sale of pre-owned Apple phones – a segment that is on an upward trajectory in SA.

“The sale of pre-owned devices is slowly being ‘formalised’ with various suppliers entering the market and providing solid after sales backup and warranties on second-hand iPhones.

“Local brands like PrO Pre-Owned are starting to gain popularity as they provide consumers with confidence in the quality of the second-hand device. The trade-in options are a key factor for consumers to consider, when deciding on purchasing a new iPhone 15.”

Apple's iPhone 15 range will be available for pre-order online from 15 September and will start arriving in some markets from 22 September.

In a statement commenting on the supply chain issues amid the iPhone 15 range launch, multinational global investment bank UBS says the new products arrive during an ongoing slump in global smartphone demand and with some uncertainty over Apple’s market access in China.

Prior to the launch, negative reports on China market access saw Apple’s share price decline around $190 billion over two trading days, says UBS.

“The global smartphone industry is in the doldrums, with year-over-year unit declines continuing in the third quarter amid weak demand in emerging markets (including China). While we aren’t projecting a significant rebound for the sector, the mainstream arrival of periscope lenses and other new tech could bolster component makers.”

In addition, a chip breakthrough in Huawei’s new Mate 60 phone has boosted Android supply chain firms and reinvigorated America’s calls to tighten export restrictions.

“Both developments suggest tougher competition ahead in China’s domestic smartphone market and near-term risk on shifting rules or restrictions. We anticipate 3Q23 marking a bottom for the supply chain, especially if a macro recovery in China consumption materialises as expected,” says UBS.

The iPhone-15-pro-max.
The iPhone-15-pro-max.

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