Apple looks to expand in India
Apple executives such as India country head Maneesh Dhir and telecom business chief Sanjay Kaul, realize that the problem with Apple's sales and presence in India is not lack of demand. The Apple iPhone is a device that many want to buy in the country. The problem is with the price of the handset in India. Because there are no subsidized pricing plans, Apple sells its iPhone in India for the full retail price. And unfortunately for Apple, this has kept them effectively priced out of the second largest smartphone market in the world after China.
For the second quarter, Samsung led the way in India with a 36% market share while Apple had just a 2% slice of the pie. Those figures are based on the number of units sold. Replace that with revenue, and because of the higher price of the iPhone in India, Apple's value share worked out to 5% in the quarter. Back in May, we told you how Apple had started to see strong momentum in India by using installment plans. After cutting the price of the Apple iPhone 4 and Apple iPhone 4s in the country, consumers in India were allowed to put down a small amount and pay off the balance over 6 or 12 months. And when Apple chopped an additional 18% off the price of the iPhone 4, the phone was available for essentially no down payment. It all led to a 400% increase in sales of the iPhone in the country. Apple iPad sales grew in the double digits during the same time period.
Now comes the next part of Dhir and Kaul's plan, which is to get the Apple iPhone, Apple iPad and Apple iPod into retailers in small towns. But once again, Apple runs into arch rival Samsung. Where the 16GB Apple iPhone 5 is priced at 45,000 Rupees ($732.60 USD), Samsung and Sony sell Android models for 30,000 Rupees ($488.40 USD) outside of the city. (Apple has yet to introduce the Apple iPhone 5s or Apple iPhone 5c in India) The 50% price difference will make it hard outside the big cities, to ring up iPhone sales.
Apple hopes to open up 100 stand alone stores inside retail locations in the smaller towns. A senior retail chain executive says that the plan might be too ambitious and even with Apple promising margins of 15% to 20% if certain sales targets are met, the small market stores cannot get the numbers that big city stores generate. But Apple cannot afford to bypass these small towns. According to the CEO of one of the country's retail chains, if Apple wants to grow 30% and higher in India annually, it needs to go after these smaller areas.
source: EconomicTimes via GigaOm
1. ScottSchneider (Posts: 313; Member since: 06 Dec 2011)
If it is so... then Apple has a really long way to go...
17. dan86 (Posts: 298; Member since: 17 Mar 2012)
Selling an iPhone which costs equal to a motorbike isn't going to help Apple win hearts of Indians. If Apple wants to expand in India or for that matter any developing countries launch spectrum of devices at every price point kind of SAMSUNG job.
22. SuperNexus (Posts: 113; Member since: 18 Jan 2013)
I think Apple is looking for idiots in India, since they found too many in USA.
2. mcshank (Posts: 47; Member since: 24 Apr 2013)
It needs to reduce the damn price of the phone. I doubt the Iphone, the 5s or lower cost that much to make. Cut the price to 550-600 and you see an increase in sells. A Massive increase. They may make less on each sell but the amount of sales will overcome the difference.
4. sprockkets (Posts: 1152; Member since: 16 Jan 2012)
Make billions or sell phones that people can afford?
The part that costs perhaps the most about the iphone, is their support staff, the stores that support the end users, the lax replacement policy, the free maps, frequent updates, etc.
Then you have a whole bunch of $99 or less phones at Virgin Mobile running Android 4.1 with a decent CPU/SOC. At this point, a lot of low end phones are really good enough, run fast enough, and don't cost much. It will be interesting to see if the iphone can still command their $650 price (and be a 16GB model at that).
3. Miracles (Posts: 469; Member since: 31 Aug 2013)
No one wants to buy a retail priced iPhone in India. Its too pricey for people. Plus no one wants to pay maintenance. You can pick up a new motorcycle for a couple of thousand more--give or take.
10. taikucing (unregistered)
in Indonesia, for the price of an iphone, I can buy a second hand 125cc honda bike that can run 110 mpg.
24. StringCheese01 (Posts: 62; Member since: 27 Jan 2012)
I know right! So many people over there don't even have TOILETS!
5. gallabk (Posts: 16; Member since: 06 Oct 2013)
Not only the Price, the availability of Nano Sim and interchangeability is also a big issue. When I went for vacation, I could not get a Nano Sim from AIRTEL for a pre-paid connection and couldnt use my iphone (It remained a costly showpiece during my entire vacation). Even for the micro sim the service providers are asking the consumers to cut and use from regular sim. (My Sim card slot of samsung galaxy S3 got damaged due to this and had to pay for a replacement as it was out of warranty.) All Iphone 5, 5S and 5C are worthless in India if the nano sim is not available abundantly.
6. aayupanday (Posts: 513; Member since: 28 Jun 2012)
The Xperia Z1 and the LG G2 are better options compared to the iPhone 5 being sold here.
Still no introduction of the iPhone 5S and 5C.... Apple's always late in the party in India.
Rumors are that the 5C would be sold at Rs40000 ($650) similar to Xperia Z1 whereas the 64 GB version of the 5S will cross the Rs75000 ($1200) barrier.
11. taikucing (unregistered)
holy crap. $1200 for a phone? this is stupid.
$650 Xperia Z1 + 64 GB micro sd card is much cheaper.
8. taikucing (unregistered)
Now Apple wants to rob poor Indian people? So sad.
9. PAPINYC (Posts: 2235; Member since: 30 Jul 2011)
This is a great thing for all Indians - 'hi-o Silverrrrrrr'!
12. yadu004 (Posts: 63; Member since: 26 Apr 2013)
Indians Don't need iphones, we need companies like Xiomi, Zte, and especially a company like "OPPO" to start-up here and give us Phones with beastly specs at affordable prices. Also most of the parts of those phones should be manufactured in our country itself.
13. jpvala (Posts: 11; Member since: 07 Oct 2013)
3 newly launch device..
Note 3 32gig 45000 Rs. (728$)
IPhone 5c 16 gig 45000 RS. (728$)
IPhone 5s 16 gig 52000 Rs. (842$)
I wonder why apple is not selling well............
16. joey_sfb (Posts: 2719; Member since: 29 Mar 2012)
Worth the price if the fan are willing to pay. My friend was moaning why Apple does not make their iPhone 5s Gold exclusive to 64G. That way he could boost his self esteem. Now the lowly 16G and 32G iPhone also has a gold version.
15. itsdeepak4u2000 (Posts: 2438; Member since: 03 Nov 2012)
You expand Apple but if you do not price competitively then you'll fail here in India to sell your iPhones. iPhones are too costly than any other flagships from Sony, Sammy, LG, Nokia, etc. and still mostly people goes for chinese rebranded phones with beasty specs from local OEMs. Indians can get 3 'Micromax Canvas 4' phones in a price of a iPhone.
18. vivek_ananda (Posts: 21; Member since: 20 Jan 2012)
converting dollars to rupees doesn't make sense. you should take account the average salary of person here. in US an average employee should shell out 1/4th of his salary to buy unlocked iphone 5s, in india he should spent his 4 month salary to buy one. this makes the real difference
19. Chizzypro (Posts: 6; Member since: 05 Oct 2013)
The cost of iphone here in Nigeria is about $1000 out right payment as there is no such thing as installment. Sadly enough, this is the cost of my college fee for 2 years. Nokia lumia is a better option in my country as it has better battery life.
21. kanagadeepan (Posts: 638; Member since: 24 Jan 2012)
Don't worry... Whatever they try to do... They can't get success in India... They are going to lose their money if they want to expand their presence without decreasing the price....
23. saiki4116 (Posts: 336; Member since: 31 Mar 2011)
Please change the photo in the article. Keeping a edited photo of a Nation's flag isn't a good idea.
25. rusticguy (Posts: 2826; Member since: 11 Aug 2012)
Apple can only dream with such pricing.
Moreover The author might not know, you are not supposed to be editing nation's flag. So get the pic changed and pl don't INSULT like this. Apple logo is just about ok on those devices that they make and not on flag.
So STOP INSULTING.
You can send me warning for trolling if you feel hurt by this message.