Apple says it’s struggling to sell iPhones in India, but it’s really not trying

0
57

As smartphone shipment slows around the globe, Apple, like every other smartphone maker, has been compelled to explore India in recent years to scout new customers. But unlike other smartphone makers that are reporting growth in India, one of the last great markets, Apple continues to struggle to make inroads in the country — and it is highly unlikely the company’s fortunes will change in India any time soon.

Fielding questions from analysts during the company’s earnings call Thursday, Apple CEO Tim Cook said the company’s business in India was “flat” during the quarter that ended in September. But Cook reiterated that he remains bullish on the nation and what the company could achieve there. Apple held one percent of India’s smartphone market in the quarter that ended in September, down from 2 percent during the same period last year, according to research firm Counterpoint.

India is a regular fixture in Apple’s quarterly earnings call. No surprise there: The country, which is poised to become the world’s most populous nation in the coming years, is the fastest growing and second largest smartphone market. But despite Cook being “bullish” on the nation for nearly a dozen quarters now, the company just can’t seem to move the needle there.

Cook cited weakening currency and local import duty for the poor sales of iPhones and other Apple products in India, Brazil, and other developing regions. “These are markets where currencies have weakened over the recent period. In some cases, that resulted in us raising prices and those markets are not growing the way we would like to see,” he said.

READ  Conan Exiles is Funcom’s biggest hit after selling 1.4 million copies

The weakened currency is just one of the latest, in the words of Cook, “speed bumps” the company is facing in India. During the earnings call, Cook suggested that when Apple opens its stores in the country, things may improve. He insisted that Apple has held “productive discussions” about the stores with the government.

Those discussions have been underway for at least the last three years. The last time they made noise, the company was hoping the Indian government would offer it some special leeway. One can argue that if Apple was really interested in opening stores in India, it would have followed the non-special path like every other company.

The motivation for opening stores in the country is to create more buzz about Apple’s products. In recent quarters, the company has visibly become more aggressive with its marketing push in India, with countless billboards in major cities plastered with pictures of new iPhones.

But the reason most Indians do not buy iPhones isn’t that they are not aware of Apple’s products; it’s that they can’t afford them. The per capita GDP in India is $1,940. All the new iPhone models are remarkably expensive in India. The starting price of iPhone XS, which is priced at $999 in the US, retails at Rs 99,900 ($1,370) in India, for instance.

During the earnings call, Cook cited the heavy tax that the Indian government levies on imported products (which, in turn, leads Apple to increase the price of iPhones) as one of the roadblocks for the growth of iPhone business in India. It’s not a unique challenge to Apple. Every other smartphone company in India has set up (or partnered with) manufacturing plants to assemble handsets locally. Samsung, a global rival to Apple, has the world’s largest smartphone plant in India, for instance. (Apple too assembles select old iPhone models in India, and those models sell at much cheaper prices.)

READ  Xiaomi Poco F1 Launched At Rs 20,999: Top 5 Alternatives

Commitments by other companies to the Indian market are already paying off — and the market is showing great appetite. Chinese phone maker Xiaomi announced this week that it shipped 12.1 million smartphones in India in the quarter that ended in September, up from 9.2 million during the same period last year. According to research firm Canalys, eight of the top 10 smartphone players operating in India managed to grow in the quarter.

In Q3, India’s smartphone market witnessed a 24 percent growth in shipment over Q2, according to research firm Counterpoint, which added that it was an “all-time high” for the local market. (It did not share the volume of units that were shipped.) According to estimates by IDC and Canalys, India accounted for more than 11 percent of all smartphones shipped globally.

One could argue that Apple should take a hit in its profits to sell the iPhones at their equivalent US prices in India. After all, it’s not uncommon in India for a company to absorb some tax to keep the price of its offering on par with global markets. Apple could also introduce a cheaper iPhone variant and sell plenty of those in the country –though Cook has shrugged off that idea in the past.

Instead, the company has largely ignored the audience that does own an iPhone in India. Apple Maps and Siri, for instance, are not customized well for the Indian audience. Additionally, several Apple services, such as Apple News and Apple Pay, are not available in India.

READ  What to expect from Apple’s iPad event

The bottom line is: As large as the Indian market is, it might not be worth it for Apple to experiment with cheaper iPhones or make other major commitments. The company has proven it can consistently raise the average selling price of its devices and generate higher revenue. And it doesn’t seem interested in deviating from that trend.

Manish Singh is a technology reporter based in New Delhi, India. His work has appeared on CNBC, The Outline, Mashable, and CNET.

Source: VentureBeat

To Read Our Daily News Updates, Please visit Inventiva or Subscribe Our Newsletter & Push.

Comments

comments

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.