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Apple’s pricing strategy will define its future. So much so that rumors already abound that a low-priced iPhone that will be coming out soon, an ultra-cheap one for US$399, well below the cost of its costly predecessors. This move should bring in sales, but cheapen the product brand as a symbol of status.

For years, the iPhone has dominated the smartphone market – but cheaper, better, and faster android versions have caught up well, garnering market share and eroding Apple’s dominance. By cheaper, these are lower-priced smartphones that offer better camera, longer battery life, and faster processors – just like the ones from Samsung and the currently embattled Huawei. The difference is that these devices only cost around US$200 to US$400 dollars per unit – compared to Apple’s US$799 phones and upwards.

When Apple released its latest generation of iPhones, the market greeted such news with little or no fanfare at all. If not for its status symbol or cult following, who would buy a pricey US$1,000 phone when a comparable android version is just US$600.

Obviously, their cult following has somewhat declined with the memory of Steve Jobs untimely passing – just maybe many are not too happy with the way things have been run after his death. Imagine, for instance, Apple Pay in partnership with Goldman Sachs – when they would be better focusing on improving their phone product. When news broke of Apple entering the financial services industry, Huawei came out with the announcement of a new smartphone with the most powerful camera that can, well, take pictures of the moon. By this, we know Apple’s agenda is misplaced.

For years, Apple has used a skimming strategy where a product is first introduced with a high price then gradually lowered. Of course, fans and trendsetters will get the phone at its launch as a symbol of status. By doing so, Apple increasingly addresses different customer groups from early adopters, medium-term adopters, and later adopters.

Yet, facts and figures have proved that no one wants to buy early on a new iPhone with so few technological advances to show when consumers can buy a cheaper android version, with more technical innovations.

Having said all that, Apple is now bent on reclaiming back loss glory and reclaiming its market dominance with a penetration pricing strategy. With this strategy, it will try to keep prices as low as possible and gain high market share as quickly as possible. Apple simply wants to keep and retain Apple customers and keep them in the Apple ecosystem – from Macs to you name it.

There is no doubt that the name Apple is attached to great quality and superb customer service. We feel there will be a trade-off here as well. And to cap it all, its competitors are upping their game by bringing out superior phones.