Apple's (AAPL) iPhone SE May Face Big Challenges in India

Apple's (Nasdaq: AAPL) iPhone SE was expected to be a "cheaper" version of its normal offerings as a way to gain market share in emerging economies, but the plan may not play out as hoped.

According to the WSJ, the iPhone SE will run around 39,000 rupees (about $586) in India. That compares with an expected post-tax price of $430 in most U.S. states.

Samsung is also going to sell its new Galaxy J2 for 8,350 rupees ($125) and Galaxy J7 for 14,249 rupees ($215), according to the companies' Indian online stores.

India has been a key focus for Apple, but growth has been absent. The company said it shipped 1.9 million iPhones to India in 2015, leaving it with market share of about 2 percent, according to IDC data.

Apple maintains about 14 percent of the global smartphone market.

One point is that Indians prefer larger screens on their devices, as the handsets generally serve as their main computer. Also, the average smartphone price in India is around $200, or about 66 percent lower than the iPhone SE's price.

Due to Apple's reliance on third-party companies to ship their smartphones to India, leaving it will little wiggle room on pricing if it wants to maintain margins.

Shares of Apple are up modestly Wednesday.

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