Slow iPhone sales in India, is becoming a difficult market for the technology major to crack. There is a 50 per cent decline in Apple’s shipments in India, after it revamped its distribution strategy.
Tim Cook says the company won’t be flogging India-specific phones to take advantage of this sizzling market, so the question remains as to how Apple plans to battle its far more inexpensive Chinese counterparts and survive in India.
The Indian market is a boon for global smartphone makers, with the number of smartphone shipments in India surging from 80 million in 2014 to 150 million in 2018, according to Counterpoint Technology Market Research. The Indian market, at its current juncture, is a once-in-a-lifetime opportunity to sell to over a billion people, many of which are buying a phone for the first time in their lives. To not take advantage of this gold rush would be considered just plain irresponsible.
By taking a look at OnePlus – which entered India even after fellow Chinese phone maker Xiaomi had established a beachhead and experienced unprecedented success through its value for money phones – it seems the company has made the most of India’s growing demand. Despite being a relative latecomer, OnePlus during the first half of 2018 surpassed rivals Samsung and Apple to become India’s best-selling smartphone brand in the premium (Rs 30,000-plus) segment.
Now, consider Apple, who lowered its revenue guidance for the first time in 20 years largely due to a tanking Chinese market. Instead of treating India like the mother-load of opportunities, like OnePlus and Xiaomi have, it has blindly coasted on the assumption that either it’s premium phones will continue to be the shiny lure to brand-conscious, well-to-do Indians, or its outdated models will be
Snapped up after a modest reduction in price. Neither thing has occured. The company experienced an unprecedented fifty percent drop in revenues; in India, the company sold just 1.7 million smartphones in 2018 as compared to 3.2 million in 2017.
What can explain such a terrible performance? No doubt OnePlus’s premium phone, such as the 6 which sold a staggering 1 million units in just 22 days, is a big reason. However, there is a serious existential dilemma that also explains this poor performance.
Apple has long struggled with the conundrum of what to do in India. Specifically, deciding on what kind of phones to flog in the country without endangering its sheen of a being a premium phonemaker. The company previously eschewed the option of custom-making a product for the masses, and opted to sell outdated 4S and 5C models in 2013 which, considering their still-lofty price tag and comparatively anaemic specs, didn’t exactly quicken the pulse of Indians.
More recently, it tried to popularise and sell the iPhone XR (a cheaper version within the X family) for over $1,000 when the price tag was 40 percent more than what it was going for in the US. Instead, the attractive looking OnePlus 6 is as state-of-the-art as they come for a premium phone, and at half the price of an iPhone.
Soon after the company’s dismal annoucement, Apple CEO Tim Cook said that he was still a “big believer” in India and “very bullish” on the country’s growth prospects but that they would not be making an India-specific phone. So, it is just as unclear today as it was five years ago how the company will curtail its slowing growth and take advantage of India’s high demand for smartphones considering the country’s per capita income is below $2,000.
Revenue jumped by 13 percent to AU$9.1 billion for the year ended September 29.
iPhone shipments declined far greater than overall smartphone shipments to China.
Revenues will come in lower than a year prior, Apple warned, due to a rough economic climate in China and fewer iPhone upgrades than expected.
Apple’s revenues may fall by as much as a third, but profits have trebled. What on Earth is going on in India?
In Japan, Apple continues closing stores outside the capital immediately after lowering its revenue guidance for Q1 2019.
What strategy should Apple embrace in order to overhaul in the sale and beat its rivalry?
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