With the iPhone being one of the best selling phones in the world, why does it fail in India?
It has been reported that Apple shipped ‘only’ 1 million iPhones in the first half of this year, that only accounts for 2% off all phones sold in India. When you compare this to the fact that Samsung sold 17.4 million in that same period, there’s no hiding that Apple is majorly underperforming.
This is definitely disappointing news for Apple as it was increasing it’s market share in India in recent years, having a higher number of sales. In 2016, Apple sold 2.6 million iPhones in India, this was a growth of over 50% when compared to the year before. It just shows how much Apple’s dominance and sales in India have dropped in the space of two years, with Apple only commanding a one per cent market share in India right now.
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One of the main reasons why Apple might be falling down the pecking order is that it’s a company that targets getting a profit rather than selling a large volume. India is a very niche market when it comes to iPhones, not everyone in the country can afford the Apple flagship devices and it tells. The premium bracket of smartphones (£400+) only contributed four per cent of the total sales in India.
Brand value means nothing
If Apple owned the premium market in India then things would be a lot rosier but they still have to compete with Samsung and OnePlus for that market. Especially when most of the customers are less inclined to pay big for a brand name, they look at the specs, Samsung has the dual-sim compatibility and the 4GB+ of RAM that market desires. This makes Apple’s job to be the top even harder.
The most popular iPhone sold in India is the iPhone 6 with the iPhone SE coming second. This is due to their £300-£400 pricing, the iPhone 6 is so popular, it is often more expensive than the iPhone SE, which is newer and faster. This is due to the big screen the iPhone 6 has, it may be the only device that someone has with an internet connection, watching videos and browsing the internet is better on a bigger screen. Another reason it sells more is the fact that you can put a case on the device which, at first glance, could be confused with an iPhone 8.
Made In India Taxes
The Made In India taxes make life tougher for Apple, it increases import duties on mobile phones but makes the parts required to make the phone locally duty free or taxable at a low cost. The Indian government is pushing Mobile Phone manufacturers to set up shop and build phones in India. Most of the big smartphone manufacturers have deals with ODMs (original design manufacturers) which are really just assembly units. This allows their devices to get the ‘Made in India’ badge that allows them to dodge the tax.
The only iPhones that come under the ‘Made in India’ line is the iPhone SE and iPhone 6S. This leaves a whole gulf of iPhones that they are having to pay the high taxes for, making Apple join the OEMs that are not using local manufacturing.
The Indian Phone market still has a massive demand for feature phones, in fact, they account for 50% of the market share. This is due to feature phones now having the basic features that entry-level phones have coupled with 4G connectivity and only costing a fraction of the price.
It’s no surprise that Apple is struggling in India but can they turn it around anytime soon? It will need to start reducing the prices and adding great value for money while building more iPhones in India itself.
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