Apple Continues to Struggle in India as iPhone Sales Drop 35 Percent in 2016

[croco_dile]

To be really blunt, Apple is on the trajectory to become a company that makes products no body wants. Its competitors are beating them at their own games, both in terms of features/functions and price. The company I work for offers its staff work phones. Over the past 3 years, its been offering both Apple and Samsung smart phones. Initially, everyone wanted iPhone but in the last 12 months, uptake for Galaxy S7 has far exceeded iPhone 6s, and now over 80% of the demands are for the Samsung.

In this scenario, it has nothing to do with cost of purchase, purely desirability.

Edit: I do want to add, that in all fairness, Apple still has the best customer service. This plus the massive customer base it has built over the past 10 years are the only thing supporting it at the moment. However, neither of these exists in India.

 

[69650]

Sales are falling in the world's two largest markets by population, India & China, despite Cook sressing the importance of both markets to Apple's continued growth. The impact of Cook's leadership are starting to show.

 

[Blaze4G]

In the words of some Apple die hard fans "nothing to see here, Apple still sold 42 billion phones. So Apple failing in India doesn't matter".

 

[johnnyturbouk]

. India is just really poor. An iPhone is nearly half a year's worth of income for most of them.

What a flawed, obtuse, and deeply offensive remark, which essentially borders on being prejudiced.
What you just said is like declaring most blacks as lazy, or most Muslims as terrorists. Just take a minute and re-read what you just wrote.

Whilst the trope that India dichotomises the super rich and super poor may hold some merit; however, to simply call them mostly poor is a deeply flawed and critically redundant comment. The world bank estimates the poverty line as 35% [CI 20 - 50%] which is still phenomenal, but then the number of rich and the middle class are growing.

You are correct in insinuating that only the rich and upper-middle class would even fathom buying the iphones at their current pricing, where android phones are far cheaper and to many just as good.

 

[kamalds]

I bought mine for INR 61,000 which is about 912.628 US Dollar! Damn.

every time i see this news the only thing that comes to my head is that Nadella is from india. and is like the indian people don't support apple because they are with Microsoft because Microsoft CEO is from india. that's why they don't support apple because they are supporting Nadella. because they don't want to betray their brother, another reason might be that Microsoft is cheaper.

Wow. By your logic, windows phone should be #1 in India.

 

[jonnysods]

What do they expect when the prices are redonkulous.

 

[maxsix]

This doesn't surprise me in the least. They still can't meet the supply of their least expensive models (iPhone SE) nearly half a year after ist launch. Sales can only drop if you can't deliver. They have a massive supply chain problem somewhere and it's definitely not helping their bottom line.

This post above is proof positive of Apple’s success in programming the general public into believing the myth. It's a brilliant strategy on Apple's part.

The reality is far different. Masterfully managing supply and demand, Apple's sleight of hand, like a good magician has people believing there's astronomical demand and limited availability. Years of this have Apple holding more cash reserves than ever. Stashed off shore to avoid their tax responsibility, Apple is fat and happy.

 

[colbertnation]

In India the issue is price. Not innovation.
It's amazing people can twist any story they read to reinforce their existing views
[doublepost=1470451703][/doublepost]
Headphone jacks?!? LOL
Name me one existing Apple phone that hasn't had a headphone jack?

In India, price is NOT the issue. As much as Tim Cook would like to blame price disparity for his shareholders, the simple fact is that India has more potential buyers of a $1000 iPhone than Australia and the US combined, due to absolute numbers alone (estimated at a lower bound range of 220 million people).

The issue as per my previous comment is the lack of features that Indians in this space typically see with high priority: dual SIM cards, expandable storage, etc. Stuff that mainstream Americans and Australians don't really care about.

Re: headphone jack, sure, I'll name you that iPhone next month

 

[KPandian1]

every time i see this news the only thing that comes to my head is that Nadella is from India. and is like the Indian people don't support apple because they are with Microsoft because Microsoft CEO is from India. that's why they don't support apple because they are supporting Nadella. because they don't want to betray their brother, another reason might be that Microsoft is cheaper.

What a moronic statement considering the status of Microsoft phones in India (or the USA or anywhere)?

If it is about computing OS, in which cave have you been living? Just crawled out to bash Indians, when Microsoft can't get people to "upgrade" for free to the "next best OS" in Windows 8 and later, in the mighty USA or European markets! If XP had access to more memory, it would still rule.

What a racist troll!

 

[InsoftUK]

Despite India's overall healthy growth in the smartphone market -- currently sitting as the third largest behind China and the United States -- Apple is having a tough time gaining ground in the country. According to a new report from Strategy Analytics, Apple saw a drastic percentage dip in iPhone users from 2015 to 2016, with 35 percent fewer iPhone devices sold this year. Earlier in May, Apple CEO Tim Cook admitted iPhones are too expensive in India, potentially harming the company's sales figures as it tries to grow.

In its new report, the market research firm said that Apple sold just 800,000 handsets in Q2 2016, while in the same year-ago quarter the company sold 1.2 million units. These deflating sales numbers rippled into Apple's operating system marketshare in India, essentially getting halved down from 4.5 percent in Q2 2015 to 2.4 percent in Q2 2016. Director of Strategy Analytics, Woody Oh, pointed out a few ways Apple might go about course correcting its current struggles in the country, including the ongoing saga of boosting its retail presence in India.

Apple Stores aren't as ubiquitous in India as they are in other parts of the world thanks to the country's rules on foreign direct investments, which required 30 percent of goods sold by a foreign company to be manufactured or produced within India. Thankfully, after a ruling in June cleared the way for companies to circumvent that law, Indian Prime Minister Narendra Modi set a precedent by granting Apple a three-year extension on the strict local-sourcing rule, due to its single-brand retail company status selling "cutting-edge technology." Companies similar to Apple are expected to get similar treatment.

While the relaxation of these rules should help Apple moving forward, it doesn't change the fact that Android remained the dominant force in India this year. In total, 29.8 million Android smartphones shipped within the country in Q2 2016, growing from 23.2 million in the same quarter last year. Similarly, Google's Android operating system remained the dominant force in the Indian mobile market with a record 97 percent hold for the quarter, increasing from 90 percent a year ago.

Apple's retail future in the country might be turning around, but the company is still hitting smaller roadblocks on its route to increasing sales figures in India. In May, Commerce and Industry Minister Nirmala Sitharaman ruled "not in favor" of a proposal laid out by Apple to sell used iPhones in the country. Thanks to Apple's repeated growth frustrations, Strategy Analytics said that Android's domination of the Indian smartphone market "looks unbeatable right now, due to its deep portfolio of hardware partners, extensive distribution channels, and a wide range of low-cost apps like Gmail."

Article Link: Apple Continues to Struggle in India as iPhone Sales Drop 35 Percent in 2016

[doublepost=1470507194][/doublepost]iPhone is old, well out of date as it has not been updated for at least two or more years, same phone just tweeked and slaps in a new case every two years, Samsung is the gold standered that Apple needs to compete against if it wished to grow

 

[G-News]

This post above is proof positive of Apple’s success in programming the general public into believing the myth. It's a brilliant strategy on Apple's part.

The reality is far different. Masterfully managing supply and demand, Apple's sleight of hand, like a good magician has people believing there's astronomical demand and limited availability. Years of this have Apple holding more cash reserves than ever. Stashed off shore to avoid their tax responsibility, Apple is fat and happy.

So you're telling me I'm just imagining the fact that I've been waiting for my SE to ship since May 20 and people in my environment who ordered in the beginning of April have only just gotten their phones a week ago?
Sure, there is no supply chain problem. Apple is pissing off its customers on purpose, because we all know that's how CEM works, right?

 

[kdarling]

In India, price is NOT the issue. As much as Tim Cook would like to blame price disparity for his shareholders, the simple fact is that India has more potential buyers of a $1000 iPhone than Australia and the US combined, due to absolute numbers alone (estimated at a lower bound range of 220 million people).

Tim Cook could be right. Previous estimates of 200 million middle class (often based on who has a color TV etc) are now seen as too high.

Credit Suisse has calculated only about 24 million people in a stable Indian middle class, which is in line with the fact that less than 2% of the population earns more than $20 a day.

Moreover, that number fits better with the sale of only a few million new iPhones a year (and that's double from a couple of years ago).

 

[colbertnation]

Tim Cook could be right. Previous estimates of 200 million middle class (often based on who has a color TV etc) are now seen as too high.

Credit Suisse has calculated only about 24 million people in a stable Indian middle class, which is in line with the fact that less than 2% of the population earns more than $20 a day.

Moreover, that number fits better with the sale of only a few million new iPhones a year (and that's double from a couple of years ago).

I read that report when it came out, and I have to say that it was met with heavy skepticism from a number of economists. The problem with countries like India and China is the difficulty with measuring wealth of people, along with other metrics like GDP, PPP, etc.

There is a LOT of "black money" (as its referred to there) that goes around in those countries. It's a physical cash heavy economy where many transactions are done in cold hard cash, and those transactions never reach legal bookkeeping. Some of these data metrics require some sort of legal footing or some sort of record keeping to trace back data, but that model is not as compatible in countries like India and China where a lot of transactions don't even have written receipts. Or the written receipts differ from the actual transaction. ("Downsizing" receipts is common there to avoid paying tax)

I won't draw out the ground scenario of India here on Macrumors, but my point is, it's very difficult to estimate middle class in India (or GDP for that matter). My business deals a lot with India, and as per my experience, I can definitely say that this concept of "black money" encourages me to back the 200 million middle class estimate. When compared to Samsung premium phone sales (the ones comparable to iPhones, and not their cheaper handsets) in India, it's definitely biased towards Samsung. Indians want things on their phones that don't matter to American people: dual SIMs, expandable storage, etc., and Samsung caters to that.

Cheaper iPhones won't hurt Apple in India: it'll definitely grow Apple customer base. But it's a misstatement to say that the current economy of India cannot support much bigger "premium" iPhone sales. A truer statement is that the current economy and state of Indian consumers doesn't support bigger iPhone sales because it's simply not as popular or in demand as "premium" Samsung phones there.

 

[Sedulous]

We can argue about screens and everything else what's evolution or innovation. My point is that Apple just comes to market with everything below the bare minimum today. It bites them back. See India, see China, see Europe and even see USA. People have good choices now and clever people choose value for money which translates in sales.
[doublepost=1470460457][/doublepost]

Isn't this the real issue here? Competition is listening what people really want. Apple is focusing in harvesting as much profits as it can with minimal investments. They were ahead till a couple of years ago. But that same trick won't work today anymore because we've good alternatives. Same with computers. That's why even diehard Apple fans start complaining. Numbers don't lie and Apple can surely do better and that's the reason people start to complain.

I don't think we disagree in practice. Fundamentally it seems a question of defining innovation. To me, "innovation" is suggestive of a novel (new) element that changes how you do things. I do agree that there are viable alternatives just as there has always been viable alternatives. In this case, you probably refer to some kind of android powered device that is likely good enough for most purposes. Yet, these competitors still cannot offer the vertical integration that usually makes Apple products work well even using the "bare minimum". Don't take my lack of Apple criticism as being satisfied with Apple as of late. Their products are confused, software unfinished, and hardware out of date by years. It makes me sad.

 

[lowkey]

In India, price is NOT the issue. As much as Tim Cook would like to blame price disparity for his shareholders, the simple fact is that India has more potential buyers of a $1000 iPhone than Australia and the US combined, due to absolute numbers alone (estimated at a lower bound range of 220 million people).

The issue as per my previous comment is the lack of features that Indians in this space typically see with high priority: dual SIM cards, expandable storage, etc. Stuff that mainstream Americans and Australians don't really care about.

Re: headphone jack, sure, I'll name you that iPhone next month

you reckon that price isn't a factor in a country where the average income is still only $1100 pa? Got a link for anything to back that up or is it just a hunch?

you also admit that the lack of headphone socket has caused exactly zero lost sales.

 

[Loco Emperor]

Sadly getting beaten by ceappy androids. Apple definitely needs to release something a bit more cost effective there.

 

[kdarling]

Sadly getting beaten by ceappy androids. Apple definitely needs to release something a bit more cost effective there.

High priced phones only did well in places where the upfront cost was subsidized down to less than $200 or so. Now subsidies are disappearing, although efforts are made to substitute more obvious loans.

Apple's (and partly Samsung's) problem is that even $200 can now outright buy a pretty darned nice phone in much of the world these days, especially from Chinese or Indian phone makers. They're not losing high end sales to "crappy" phones. They're getting beat by phones with more bang for the buck.

It's like any other product from DVD players to TVs to microwave ovens; eventually their cost drops like a rock.

 

[Tiger8]

High priced phones only did well in places where the upfront cost was subsidized down to less than $200 or so. Now subsidies are disappearing, although efforts are made to substitute more obvious loans.

Apple's (and partly Samsung's) problem is that even $200 can now outright buy a pretty darned nice phone in much of the world these days, especially from Chinese or Indian phone makers. They're not losing high end sales to "crappy" phones. They're getting beat by phones with more bang for the buck.

It's like any other product from DVD players to TVs to microwave ovens; eventually their cost drops like a rock.

You're on the money. I'm a long time apple user and still use iPhone, but I tested a $400 windows phone two years ago, which was nice , & this year tested a moto e 2nd gen ($100 unlocked). It's not a premium phone but offers excellent experience, no lag, good screen, good features. Honestly I'd say it did most of the things my iPhone 6 did. Apple also no longer holds the App Store advantage. Made me truly wonder why one is $650 the other is a $100

 

[d5aqoëp]

every time i see this news the only thing that comes to my head is that Nadella is from india. and is like the indian people don't support apple because they are with Microsoft because Microsoft CEO is from india. that's why they don't support apple because they are supporting Nadella. because they don't want to betray their brother, another reason might be that Microsoft is cheaper.

But Google's CEO is also an Indian. So Apple board needs to fire Timmy and hire an Indian CEO.

No betrayal. Only brotherhood! LMAO

 

[ShubhamBhatia]

Lazy's got nothing to do with it. India is just really poor. An iPhone is nearly half a year's worth of income for most of them, so of course they're not buying.

Bro, price of iphone 6s 16gb was $1,000, now its near about $720-$750 after major drop they said. Why would anyone gonna get a phone for this price when they can ask their friends in US for much lesser price. We have iphones. Even nowadays almost everybody is using an iphone but not an indian version. And those who have indian version are holding iphone 5s and 6/6plus. because it has some worth at price point. Whereas in india apple is still selling iphone 5s at price of iphone se. There is no reason for selling product made in china (neighbor of india) at much higher price like its very difficult to ship here.

 

[colbertnation]

you reckon that price isn't a factor in a country where the average income is still only $1100 pa? Got a link for anything to back that up or is it just a hunch?

you also admit that the lack of headphone socket has caused exactly zero lost sales.

I reckon you didn't understand my comment, or more likely simple math/economics.

My point is that price is not an issue for 100-200 million Indians who can afford "premium phones." The average income is a nonsense figure in this discussion because the population is a billion humans. Just like how you have homeless people in Sydney and Melbourne dragging average income down in Australia, you'll have people in the slums of India dragging the average income down. But by sheer absolute numbers alone, India's a bigger market than Australia and US combined.

Just google for links for facts mate, I'm on mobile.

 

[LunarMustard]

Lazy's got nothing to do with it. India is just really poor. An iPhone is nearly half a year's worth of income for most of them, so of course they're not buying.

You have a right point there. I am an Indian and believe me, people who can even afford to buy an iPhone will avoid buying one. iPhone here is more like a luxury and less of a smartphone. I am a macbook pro user but I still prefer to use Android phones because doing file transfers and bluetooth transfers are simple compared to the iTunes sync.

 

[moxin]

sorry Apple, India is not a good targeted market for you

 

[The Game 161]

Well 97% of phones seem to be android judging by a recent report

 

[Savor]

Less than 2.5% is terrible marketshare in India. iPhone users seem like Windows Phone over there.

Indians are highly critical smartphone users. Any flaw, and they complain on GSM Arena and practically want flagship specs for dirt cheap. They are also into hacking as much as saving money. I study their YouTube videos because many of them love to root their Android phones and they are into brands that aren't popular like in the States. Like the Chinese but more critical and frugal. Go on MIUI forums and many of them are Indian if they aren't Chinese.

The only Indian I follow is Ash from C4ETech. I can't understand the rest of them. Understand in Asia especially in countries where piracy and fake clones are common, we have many different brands. Indians love to look for value like Chinese and Filipinos. That's why iPhones isn't as dominant because there are too many brands to choose from including local branded ones for much cheaper. We also don't always benefit from carrier subsidized pricing. Credit cards isn't as common. Apple jacks up the prices up anyway to the poorer nations.