With sales in China down, Apple looks to India for growth

With sales in China down, Apple looks to India for growth
When Apple reported its fiscal fourth quarter earnings earlier today, it announced that sales in China during the three month period slid 30%. Looking at the actual sales figures, revenue from China declined to $8.8 billion from last year's $12.5 billion. It was the only one of Apple's markets to tally a sequential decline in revenue from the fiscal third quarter. During that three month period, Apple's sales in China dropped by 33%.

Apple CEO Tim Cook blames the problems in China on the extremely successful launch of the Apple iPhone 6 and Apple iPhone 6 Plus in 2014. Apple had just increased the iPhone screen to 4.7-inches, and introduced its first 5.5-inch phablet. Chinese consumers went gaga over the larger screened phones and sales peaked that year. Apple expected sales in China to continue at the same level, but when upgrade rates returned to average, Apple had too much inventory in its Chinese sales channels. 

While Cook is still bullish on China, Apple is looking hard at India. The problem there is that while the country is the second largest smartphone market, the average Indian makes less than $3.10 USD a day. 70% of the smartphones sold in the country last year were priced under $150. Thus, it is no surprise that at $300, the Apple iPhone 5s is the company's top seller in India. Cook notes that iPhone sales in India rose 50% in fiscal 2016. While India's GDP is rising, the CEO says that this is not a precursor for strong iPhone sales in the region thanks to a growing middle class.

Apple hoped to improve its visibility in the country by opening Apple Stores in India, but India's laws require that 30% of such a store would have to contain products locally sourced. In addition, Apple has been shot down with its requests to sell refurbished models in India. Earlier this year, analyst Gene Munster said that Apple could add 62 million iOS users in India by bringing its presence in India to the same level it is in China.


Apple also announced today that it is entering into a deal with Indian carrier Reliance Jio. The latter is looking to build 4G networks in 18,000 Indian cities and 200,000 villages. Apple iPhone buyers in India will get a free year of service from Jio.

source: AppleInsider

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26 Comments

1. darkkjedii

Posts: 31603; Member since: Feb 05, 2011

Drop the damn prices. Great phone, but it is a bit over priced.

10. Nathan_ingx

Posts: 4769; Member since: Mar 07, 2012

Was just about to comment the same thing. Reduce the price and bring it somewhat close to the original US asking price and maybe, just maybe, I may consider it someday too. I know plenty of friends who will not think about Android if the price is reduced to a reasonable amount.

11. Finalflash

Posts: 4063; Member since: Jul 23, 2013

Why in hell would anyone buy an iPhone in India? The whole advantage of iPhones is their synergy with other Apple products but in India, the number of people able to throw down that kind of cash can be counted on 1 hand. The iPhone offers nothing over Android flagships and even some mid rangers other than CPU performance which is downright useless unless you want to encode/decode large files all day. For everyday tasks, a mid range Android device with far more features than a top of the line Apple device is easily a better choice for 1/4 the price.

12. Nathan_ingx

Posts: 4769; Member since: Mar 07, 2012

I just said "maybe", lol. I know what you're talking about, and I understand, which is why I'm just not ready to leave Android. But more than half of my friends don't understand things going inside. They just know 4GB/1GB/2GB RAM, they don't know DDR3 or DDR4, they don't know read and write speeds affect the copy paste protocol. They know 8/12/21 megapixels, they don't know which sensors is used, the aperture, the algorithm which is more important than the actual megapixels of the camera. They use original chargers but they don't know their device is QC2/3 compatible so they use the stock charger. These are just some examples out of many. When it comes to this...they just want an iPhone which is well, an iPhone. The specs race is strong with Android but Apple stands alone in iOS category.

19. Finalflash

Posts: 4063; Member since: Jul 23, 2013

But that is the problem and Apple's current predicament. People aren't buying iPhones in China and India because of anything objective. They're buying it for the subjective appeal, in that people cannot afford it and those that have it then feel superior/rich. Reducing the price will just kill that effect. In the US, the same feeling persisted until everyone got an iPhone, and since then, no one but a few delusional fans even bring up the "premium" feel of the iPhone as a point of appeal. They can't reduce prices, but without that they cannot increase sales because they refuse to actually add useful new features (and are currently taking features away).

22. Odiin

Posts: 373; Member since: Apr 23, 2013

+1 Nathan well said.

24. darkkjedii

Posts: 31603; Member since: Feb 05, 2011

Good post Nathan. +1

21. nokia12

Posts: 610; Member since: Nov 19, 2013

"Why in hell would anyone buy an iPhone in India? The answer is simple .. Bragging rights / Prestige / Show off Because apple phones are out of reach for so many people .. it automatically becomes a luxury brand.. Also since most people aren't tech savy they really don't care what features does a phone provide .. as long as they can call , text , whatsapp , facebook , and has a good camera .. a 3 year old iphone will have more show off worth than any latest high end samsung phone ..

23. darkkjedii

Posts: 31603; Member since: Feb 05, 2011

I mean it only makes sense. If they want strong sales there, and the average wage is low...compromise.

2. mahima

Posts: 743; Member since: Nov 20, 2014

good luck...lol!!

3. windowsRocks

Posts: 155; Member since: Oct 28, 2011

Most of the people who can affort an iPhone have already bought the previous models others are happy with thousands of Android models

4. Ruturaj

Posts: 1484; Member since: Oct 16, 2014

At INR 60,000 ($900) for a phone, it's a costly one. S series is better buy in India, value for money.

5. HugoBarraCyanogenmod

Posts: 1412; Member since: Jul 06, 2014

For India middle class standard, you can only expect Apple able sell iPhone se only.

7. sukrith2194 unregistered

No one in India as far as I know is buying the se... There are a few people with the 5S as it costs somewhere near the price of 20K inr just for the Apple logo... But people don't get the se because it's too small and looks similar to the 5S which makes them look cheap as the se is 40K in India but people will see them as the person who uses a 20K phone and frankly many don't even know the existence of the se!

6. sukrith2194 unregistered

Indian's ain't stupid! And those stupid enough will get iPhones just for the Apple logo and then cry about its shortcomings!

8. bambamboogy02

Posts: 842; Member since: Jun 23, 2012

Reality is, much the same with almost all south Asian countries, the people can't afford it.

9. kumarabhishek591

Posts: 153; Member since: Feb 22, 2014

Cant say about the whole country but in my city 30% have iphones and majority have iphone 6s. few also bought iphone 7. Though i dont understand why spend so much money on it still its not like they are poor or are buying only 5s as everyone tends to believe.

13. MargaretNelson

Posts: 1; Member since: Oct 25, 2016

I know of a lot of people who would buy Iphone no matter whatever the cost is.For them,Iphone is a symbol of pride.Most of the people who are rich,and doesn't even know the features of Iphone buy iphone solely for the purpose of showoff. bestessaywritingservice.co

14. emmawilliam834

Posts: 241; Member since: Feb 09, 2016

India should not allow apple to sell Chinese-made phones in India.

15. rkoforever90

Posts: 477; Member since: Dec 03, 2011

how they expect to sell their overpriced junk in a country where average income is under 4$ per day.

16. Papa_Ji

Posts: 878; Member since: Jun 27, 2016

Chutiya ...... From where did you get this data.... Chutiya.....

26. tech2

Posts: 3487; Member since: Oct 26, 2012

You must also know the income disparity in India is HUGE ! So, whether that's true or not $4/day doesn't mean anything. There are a lot of people who earn way more but due to large number of people living below poverty line in India the average income is significantly low. The people earning higher income in India is much more than you think but they get overshadowed because even a small percentage of 1.2 billion is a lot of people in general sense. Also, 4$ in India is a lot, comparatively. Google, what is PPP.

20. MrAnonymous

Posts: 95; Member since: May 25, 2014

What's with refurbished products are not allowed?? i see official refurbished products of oneplus, xiaomi, sony etc on amazon

25. vishnu_ramesh

Posts: 38; Member since: Mar 01, 2016

Finally iPhone 5 and 5S sales are becoming in popular in India as a result of price reduction of iPhone 6 and 6Plus which was because of reduction in price of SE, 6S and 6S Plus which was due to the new entry of iPhone 7 and 7Plus!! ROFL!!! Apple cant survive here

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