Apple, towards the end of 2012, introduced the first EMI scheme for those planning to buy the iPhone-4 (then priced over Rs 30,000).
Make part payment upfront and the remaining will be billed in equal instalments, it said.
Six months later, rival Samsung has came up with a better offer: zero interest and cash back options for handsets priced over Rs 20,000 — nearly double the average price paid by Indian smartphone consumers.
To win customers in the high-priced ‘premium’ smartphone segment, a number of handset-makers are latching on to easy financing options.
And after some initial hesitation, consumers are now game for these schemes.
Retailers’ feedback, too, validates gaining acceptance.
According to Faisal Kawoosa, senior analyst, Telecoms and Semiconductor & Electronics Practices at Cyber Media Research, in a price sensitive market like India, such EMI schemes have made possessing high-end handsets easy.
“While brand loyalists say 5 per cent of users will continue with their preferences, EMI schemes do influence around 40-50 per cent of the buyers who wish to upgrade to a new smartphone,” he told Business Line.
Moreover, with handset bundling (where high-end handsets are subsidised through usage of data offers) yet to pick up in India, easy financing schemes looks to be the way forward for premium models.
Impact on Sales
Both Apple and Samsung retailers pointed at an upward movement in sales.
An Apple store in Kolkata confirmed that out of every 10 handsets sold, seven are through easy-financing options.
“We do get a number of queries not just for the iPhone, but also on other high-end Apple products,” the store manager said on conditions of anonymity.
Similarly, a Samsung store claimed at least 40 to 50 per cent of sales (4-5 out of every 10 handsets sold) through EMI schemes on handsets priced over Rs 20,000.
“On an average, every second query that we get is on easy financing schemes,” a Samsung store-owner, who did not wish to be identified, said.
BlackBerry, though, is yet to introduce such easy-finance options across its stores.
Prosenjit Sen, its Director-Channel Sales, in an earlier interaction with Business Line, said the company was in talks with banks to introduce easy finance schemes.
New Models
Interestingly, market sources maintain that it’s not just the handset-makers who offer options.
Some organised retailers like The Mobile Store or E-zone also have such financing schemes.
Offers include waiver of processing fees and payments for a period ranging between three months to a year through equated instalments.
“In some cases, the financing schemes are given by the franchise or retailers depending on the nature of tie-ups,” a Samsung-franchisee said.