Apple Has Encountered 'Little Success' Growing in India Due to High Prices of iPhones

Discussion in 'MacRumors.com News Discussion' started by MacRumors, Dec 18, 2018.

  1. MacRumors macrumors bot

    MacRumors

    Joined:
    Apr 12, 2001
    #1
    [​IMG]


    The Wall Street Journal has published an in-depth look at Apple's efforts to grow its sales in India, the "world's biggest untapped tech market." With smartphone sales flattening in saturated markets like the United States, Apple is said to have turned to India for new growth, but with "little success so far."

    [​IMG]

    The report claims that just one in four Indians own a smartphone, providing Apple with an opportunity to sell iPhones to millions of new customers in the country. The issue is that India is a very price-sensitive market, with more than 75 percent of the smartphones sold in the country costing "less than $250."

    Apple-authorized reseller Flipkart continues to sell the iPhone SE in India for around $250, but other iPhone models are priced between the equivalent of $325 and $1,950 in the country, well above the budgets of many Indian customers.

    The Wall Street Journal explains:
    The report claims the number of iPhones shipped in India has fallen 40 percent so far this year compared with 2017, and Apple's market share in the country has dropped to about one percent from about two percent, citing research firm Canalys.

    Apple created a five-year plan to increase Apple's sales in India to $5 billion by 2020, but the iPhone maker posted revenues of $1.8 billion in the country in its most recent fiscal year, according to the report, suggesting that the company is unlikely to meet its target without explosive growth within the next fiscal year.

    Government policies haven't helped the situation. Apple has faced difficulties in openings its first retail store in India, for example, as the country requires single-brand, majority-foreign-owned retailers to source at least 30 percent of their manufacturing materials from India-based suppliers.

    As one would expect, though, Apple CEO Tim Cook remains optimistic about Apple's future in India based on his recent comments.

    "We've had really great productive discussions with the Indian government and I fully expect that at some point they will agree to allow us to bring our stores into the country," Cook said on Apple's earnings call last month. "We've been in discussions with them and the discussions are going quite well."

    "I am a big believer in India," he added. "I am very bullish on the country, and the people, and our ability to do well there."

    Article Link: Apple Has Encountered 'Little Success' Growing in India Due to High Prices of iPhones
     
  2. Caliber26 macrumors 68000

    Caliber26

    Joined:
    Sep 25, 2009
    Location:
    Orlando, FL
  3. rgbrock1 macrumors newbie

    Joined:
    Feb 1, 2016
    #3
    Trying to sell a phone which costs much more than the annual salary of a perspective customer is an exercise in futility. What is it that Apple doesn't understand about this?
     
  4. Pepe4life macrumors member

    Pepe4life

    Joined:
    Nov 15, 2018
    #4
    Why does apple even bother with India? Their government imposes ridiculous restrictions on foreign companies and their people are too poor to afford iPhones.
     
  5. mozumder macrumors 6502a

    Joined:
    Mar 9, 2009
    #5
    Also, you have to bribe a million people just to open a store...
     
  6. FrenchRoasted macrumors regular

    FrenchRoasted

    Joined:
    Sep 21, 2016
    #6
    How will opening an Apple store make iPhones less expensive?
     
  7. Abs_p macrumors 6502a

    Joined:
    Jul 15, 2011
    #7
    Even if just 5% of Indians bought iPhones, they would still have 50million customers.Not rocket science, is it?
     
  8. Pepe4life macrumors member

    Pepe4life

    Joined:
    Nov 15, 2018
    #8
    At the cost of having to set up manufacturing in India and comply with their draconian laws.
     
  9. rbrian macrumors 6502a

    rbrian

    Joined:
    Jul 24, 2011
    Location:
    Aberdeen, Scotland
    #9
    I stopped buying iPhones when they put the price up to more than half my monthly income, and switched to Android.
     
  10. falainber macrumors 65816

    falainber

    Joined:
    Mar 16, 2016
    Location:
    Wild West
    #10
    Well. If Apple continues on its path, iPhone share in US (and elsewhere) may drop to 1% in no time.
     
  11. jscipione macrumors member

    jscipione

    Joined:
    Mar 27, 2017
    #11
    This is the real reason why there is no iPhone SE2.
     
  12. timber macrumors 6502

    Joined:
    Aug 30, 2006
    Location:
    Lisbon
    #12
    Well even if 1 % of the population can afford an iPhone that leaves you with 13 million potential customers which is more than the entire population (including children, poor, rich, whatever) of several European countries that Apple does serve.
     
  13. Abs_p macrumors 6502a

    Joined:
    Jul 15, 2011
    #13
    Wistron already has a plant there.

    It would just need a few modifications.

    Only an idiot would ignore a country of 1.3billion, 1% of 1.3bil is 13mil. 5% is 65mil. Even if just 5% of Indians buy an apple product, Apple will still make billions.
     
  14. maflynn Moderator

    maflynn

    Staff Member

    Joined:
    May 3, 2009
    Location:
    Boston
    #14
    I'd say iPhone prices in the US are well above many US customers, not just Indian, and that may be one reason why sales are slowing in the US
     
  15. Abs_p macrumors 6502a

    Joined:
    Jul 15, 2011
    #15
    Lol this. I am a doctor, make enough money to afford any iPhone on market right now but I still wont ever spend $1400 on an iPhone, even $1000 makes me think twice.
     
  16. AutisticGuy macrumors member

    Joined:
    Feb 1, 2018
    #16
    Tim Cook has failed to establish himself in pretty much any “up and coming” markets including China. I’m not sure why he gets such an easy pass by Apple fans when it comes to this. Fact is, Tim Cook needed to raise prices in hopes that the Western markets will open up their purse strings and pay for this failure. This is not a CEO who planned for long term growth, and it’s going to show in the near future.
     
  17. JPack macrumors 68040

    JPack

    Joined:
    Mar 27, 2017
    #17
    Right there is the main problem.

    Keep in mind the average selling price of a smartphone in India is $157.

    The majority of Indian consumers can't afford a phone of any kind. More 50% of the phones that do sell in India are feature phones (dumb phones). Smartphones represent less than half of the sales. And Tim Cook is trying to sell expensive smartphones.
     
  18. spacebro macrumors 6502

    Joined:
    Oct 1, 2015
    #18
    I worked with some Indian engineers who all had MacBooks. They paid over a year's salary for those MacBooks. They spend more of their salary on their MacBook than Americans typically spend on cars.
     
  19. Val-kyrie macrumors 68000

    Joined:
    Feb 13, 2005
    #19
    Too bad Apple’s market share is dropping there.

    Apple just refuses to accept the fact that not every market functions in the same manner.
     
  20. Enclavean macrumors regular

    Enclavean

    Joined:
    Jun 14, 2018
    #20
    Interestingly enough, in Thailand you will see more people with iPhones because even the poorer people are willing to sacrifice more to get that status. It's not uncommon to see people with cars as expensive as their house instead of, you know, getting a house thats twice as nice because cars are a status symbol.
     
  21. WannaGoMac macrumors 68020

    WannaGoMac

    Joined:
    Feb 11, 2007
    #21
    All businesses with physical products (i.e. not software) have this issue in 3rd world economies. Fact is, those economies at best can afford only offer extremely inexpensive products, which means next to nothing margins.
     
  22. MagicWok macrumors 6502a

    Joined:
    Mar 2, 2006
    Location:
    London
    #22
    I think Apple deserve their level of success.
     
  23. nitant macrumors newbie

    nitant

    Joined:
    Oct 16, 2007
    Location:
    Maple land
    #23
    IDK Samsung/Google etc seem to have no issues selling Premium Phones in India.

    The issue is not the price, it is the ecosystem. Apple phones just do not work well in the Windows/Google ecosystem and the rich people who can afford them, are normally not very computer savvy.

    To fix this, Apple needs to whole hog. With the whole ecosystem. That is the only way I feel it would work.
     
  24. critter13 macrumors 6502

    Joined:
    Aug 23, 2010
    #24
    the iPhone SE is still a great phone, feels almost as fast as my X, i would think it would do well in India.
     
  25. Westside guy macrumors 603

    Westside guy

    Joined:
    Oct 15, 2003
    Location:
    The soggy side of the Pacific NW
    #25
    Yeah, I would hazard to guess there are a lot of people who nowadays just don't see the value in dropping $800-$1200 for a new phone when their current phone (or, for that matter, a new $400 non-iPhone) does everything they need or want a phone to do.
     

Share This Page