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

[Ramchi]

And I do feel that Samsung has come a long way from aping Apple to finding their own unique design language.

Thing is, they still run android (a commoditised OS), and don’t really have any unique ecosystem to call their own which really adds to the user experience. Their services are non-existent.

Not to mention their design philosophy could not be any further apart. Apple just wants to make the best products possible (based on their idiosyncratic vision of what “best” entails, but still), while Samsung just wants to beat Apple.

And that is why there is still that gap between the two, because Samsung still doesn’t know what it is they want to stand for (with regards to their mobile products).

That much I agree that Samsung wants to compete with Apple(like any other Chinese companies) or compete with the market leaders in their respective product categories instead of being identified like Sony or Nikon or Cannon to be the leader, chief innovator, unique etc... probably because for companies like Samsung without Apple their identity would be buried deep inside

 

[Shanghaichica]

And I do feel that Samsung has come a long way from aping Apple to finding their own unique design language.

Thing is, they still run android (a commoditised OS), and don’t really have any unique ecosystem to call their own which really adds to the user experience. Their services are non-existent.

Not to mention their design philosophy could not be any further apart. Apple just wants to make the best products possible (based on their idiosyncratic vision of what “best” entails, but still), while Samsung just wants to beat Apple.

And that is why there is still that gap between the two, because Samsung still doesn’t know what it is they want to stand for (with regards to their mobile products).

I agree I think Samsung make fantastic hardware but they haven’t managed to generate the same type of brand loyalty as Apple have, which I think is due in part to them not having a real philosophy and tangible ecosystem.

 

[Michael Goff]

That is true, I guess it could be said that Apple iPhone costs most to produce. It’s not quite the same as being “best” though. I’m not saying much I guess

I mean, probably. They do have to make iOS and they do have to design the A series chips.

 

[dilbert99]

no **** sherlock

Doesn't help that Apple has been steadily raising the prices of their phones.

 

[Shanghaichica]

I mean, probably. They do have to make iOS and they do have to design the A series chips.

Do they cost more to produce because of the actually materials or because they don’t have their own manufacturing plants like Samsung do?

Ecosystem, customer service, software and support aside on a hardware basis I can’t see there being much difference in manufacturing cost between an iPhone XS Max and a Galaxy note 9.

 

[BuddyTronic]

Do they cost more to produce because of the actually materials or because they don’t have their own manufacturing plants like Samsung do?

Ecosystem, customer service, software and support aside on a hardware basis I can’t see there being much difference in manufacturing cost between an iPhone XS Max and a Galaxy note 9.

Oh I think it’s fairly well known what the bill of materials costs for all devices - I don’t have any good data to post to you but I think you can find it from some of those take apart sites or bill of materials websites - they kind of specialize in being the first to take apart all new electronic devices. Maybe for some of the proprietary parts they have to guess a bit but Apple claims to have 38% profit margins so you can back into their actual costs of the hardware easily.

Any smartphone costing $180.00 brand new definitely is cheaper to make than Apple’s latest iPhones. That’s the common sense I’m thinking of here.

 

[Michael Goff]

Do they cost more to produce because of the actually materials or because they don’t have their own manufacturing plants like Samsung do?

Ecosystem, customer service, software and support aside on a hardware basis I can’t see there being much difference in manufacturing cost between an iPhone XS Max and a Galaxy note 9.

Manufacturing on Samsung's fabs aren't exactly going to be more expensive. It isn't as though the Samsung that makes the chips is the same part of the company that makes phones.

Samsung, though, likely doesn't design as much of their chips as Apple does. I am pretty sure Samsung doesn't make their own GPU, for example.

Edit: And you can't divorce the support and software from the costs of the phone.

 

[kshitijshah]

Why does apple even bother with India? Their government imposes ridiculous restrictions on foreign companies and their people are too poor to afford iPhones.

It maybe news to you but the unofficial number on penetration of iPhones in India is much more than the reported number as the top 5% mainly imports their phones from other countries due to the ridiculous prices of nearly USD 2000 for the top end iPhone XS in India> Apple just wont budge from the most regressive pricing policy in India. if Samsung can sell the USD 1000 Note 9 at a sticker price of Rs 67,900 why cant Apple sell the iPhone Xs for the same price? Instead iPhone XS 64GB has a sticker price of Rs 99,900

Samsung Note 9 - USD 1000 - Rs 67,900
iPhone Xs 64GB - USD 1000 - Rs 99,900 - a premium of 47%!

Probably Samsung sees the potential of India and has setup the worlds largest mobile factory in India ( https://news.samsung.com/in/samsung-inaugurates-worlds-largest-mobile-factory-in-india )

Also Indians are not in the Apple and iMessage ecosystem and don't see the need to pay this nearly 50% premium on flagship Androids. Besides Google delivers on a far better ecosystem in India compared to the non-existent Apple Maps, Apple Pay, Retail and Support Network. If you want to grow in India you have to invest in India.

So its not that Indians are too poor to afford "smartphones" - Indians are smart in seeing value and are voting with their wallets.

 

[Shanghaichica]

Manufacturing on Samsung's fabs aren't exactly going to be more expensive. It isn't as though the Samsung that makes the chips is the same part of the company that makes phones.

Samsung, though, likely doesn't design as much of their chips as Apple does. I am pretty sure Samsung doesn't make their own GPU, for example.

Edit: And you can't divorce the support and software from the costs of the phone.

I’m just interested from a purely theoretical point of view. The reason I buy an iPhone at a higher price is because of the software, ecosystem and support. I’m just interested in the actual hardware costs versus a flagship android phone.

 

[ROGmaster]

There are fewer than a million families in India (maybe far fewer in fact) who can afford to buy smartphones worth USD 1000 for every member of their family and then upgrade each year. And you can't expect all of them to actually spend USD 1000 per year per person in the family. Of those who do, Apple has >90% market share already.

Cool story but you ignore the simple fact that Apple's market share decline 40% in 2018 vs 2017 in India.
If Apple would have such an obvious and tight grip on the +600$ smartphone market in India why is their market share in such a decline? Are Indian people getting poorer? Highly doubtful.

 

[aakshey]

Cool story but you ignore the simple fact that Apple's market share decline 40% in 2018 vs 2017 in India.
If Apple would have such an obvious and tight grip on the +600$ smartphone market in India why is their market share in such a decline? Are Indian people getting poorer? Highly doubtful.

Nope. Apple has increased their prices. Indians buy iPhones only for show off. Fewer people can spend USD 1500 for an iPhone than could spend USD 800. And those who can’t afford a X or XS no longer buy iPhones. That’s the reason.

 

[kshitijshah]

How many Top 100 Best Global Brands and locations are there in India? Virtually none.

Louis Vuitton

• India: 3
• U.S.: >30
• China: >30

Chanel boutiques

• India: 1
• U.S.: 11 in NYC alone
• China: 12 in Beijing alone

Hermès

• India: 2
• U.S. >40
• China: 50

Wow comparing a phone to a Luxury car like a Mercedes or high end fashion brands! You must be a complete fanboy!

 

[ROGmaster]

Nope. Apple has increased their prices. Indians buy iPhones only for show off. Fewer people can spend USD 1500 for an iPhone than could spend USD 800. And those who can’t afford a X or XS no longer buy iPhones. That’s the reason.

You don't understand.
Your claims don't add up. Oneplus has over 40% of the +500$ smartphone segment in India and Samsung owns most of the rest. So more and more of the Indians that can spend 1500$ on an smartphone don't chose an iphone. Apple has actually been losing ground in India in the segment where they were relevant.

 

[kshitijshah]

YoY price increase in India at Top end

iPhone X 256GB Sticker price (Sep 2017) - Rs. 1,02,000
iPhone Xs 512GB Sticker Price (Sep 2018) - Rs 1,45,900

43% YoY increase - This is a problem Apple has created for itself. How long can you expect people to suck it up and buy especially when you haevent been investing at all in the Indian services eco-system - No Apple Maps, no Apple Pay, No Apple Stores, Poor Service experience, No Apple News, No HomePod yet.

Google on the other end is racing ahead with all of this - Google Pay, Google Maps in India is so far Ahead, Samsung, Pixel, OnePlus, Huwawei, Xiaomi have retail presence and support. Alexa and Google Home have a strong app ecosystem and localized languages.

 

[Bacillus]

Nope. Apple has increased their prices. Indians buy iPhones only for show off. Fewer people can spend USD 1500 for an iPhone than could spend USD 800. And those who can’t afford a X or XS no longer buy iPhones. That’s the reason.

Apple certainly inspired the “show off”-buyers with its $300 iPhone 7 graphic chip repairs.
Clever marketing.

 

[aakshey]

You don't understand.
Your claims don't add up. Oneplus has over 40% of the +500$ smartphone segment in India and Samsung owns most of the rest. So more and more of the Indians that can spend 1500$ on an smartphone don't chose an iphone. Apple has actually been losing ground in India in the segment where they were relevant.

There was a report that stated the below:

OP has 45% of the > USD 400 market in India. Apple has 12%.

But in the > USD 600 market Apple has 72%.

And yes this makes perfect sense. If you don’t understand then this is simple math. These claims aren’t contradictory at all.
[doublepost=1545212141][/doublepost]

Wow comparing a phone to a Luxury car like a Mercedes or high end fashion brands! You must be a complete fanboy!

He’s doing the right thing. Apart from a few fanboys, most Indians who purchase 1-1.5L smartphones also shop at those brands.
[doublepost=1545212216][/doublepost]

YoY price increase in India at Top end

iPhone X 256GB Sticker price (Sep 2017) - Rs. 1,02,000
iPhone Xs 512GB Sticker Price (Sep 2018) - Rs 1,45,900

43% YoY increase - This is a problem Apple has created for itself. How long can you expect people to suck it up and buy especially when you haevent been investing at all in the Indian services eco-system - No Apple Maps, no Apple Pay, No Apple Stores, Poor Service experience, No Apple News, No HomePod yet.

Google on the other end is racing ahead with all of this - Google Pay, Google Maps in India is so far Ahead, Samsung, Pixel, OnePlus, Huwawei, Xiaomi have retail presence and support. Alexa and Google Home have a strong app ecosystem and localized languages.

Non sense.

This price increase is there in USA and EU too.

All of those Google apps work just fine on iOS too.

And there is no proper ecosystem or it’s demand thereof to speak of in India.

It’s a simple money issue. That’s it.

 

[Shanghaichica]

There was a report that stated the below:

OP has 45% of the > USD 400 market in India. Apple has 12%.

But in the > USD 600 market Apple has 72%.

And yes this makes perfect sense. If you don’t understand then this is simple math. These claims aren’t contradictory at all.
[doublepost=1545212141][/doublepost]

He’s doing the right thing. Apart from a few fanboys, most Indians who purchase 1-1.5L smartphones also shop at those brands.
[doublepost=1545212216][/doublepost]

Non sense.

This price increase is there in USA and EU too.

All of those Google apps work just fine on iOS too.

And there is no proper ecosystem or it’s demand thereof to speak of in India.

It’s a simple money issue. That’s it.

The Xs is the same price as the X was last year in the UK. The Xs max is more expensive but that model wasnt available last year. There has been no YoY increase in price from the X to the Xs in the UK. I suspect this is the same in the US too.

 

[kshitijshah]

There was a report that stated the below:

OP has 45% of the > USD 400 market in India. Apple has 12%.

But in the > USD 600 market Apple has 72%.

And yes this makes perfect sense. If you don’t understand then this is simple math. These claims aren’t contradictory at all.
[doublepost=1545212141][/doublepost]

He’s doing the right thing. Apart from a few fanboys, most Indians who purchase 1-1.5L smartphones also shop at those brands.
[doublepost=1545212216][/doublepost]

Non sense.

This price increase is there in USA and EU too.

All of those Google apps work just fine on iOS too.

And there is no proper ecosystem or it’s demand thereof to speak of in India.

It’s a simple money issue. That’s it.

This is the problem after 11 years if Apple thinks their phones are luxury products and don't give equivalent service support they shouldnt be bothered about market share.

Also US and EU haven't seen the same magnitude of YoY price hikes and they have a very strong support and service experience.

So to keep expecting Indians to suck it up and pay for a clearly high priced but inferior overall experience than competition is living in a fools paradise.

 

[aakshey]

The Xs is the same price as the X was last year in the UK. The Xs max is more expensive but that model wasnt available last year. There has been no YoY increase in price from the X to the Xs in the UK. I suspect this is the same in the US too.

Indian govt increased duty and INR crashed.

 

[kshitijshah]

Indian govt increased duty and INR crashed.

Then why is the Note 9 or OnePlus still priced the same YoY or seeing a marginal increase? Clearly its a Apple problem.

 

[aakshey]

Then why is the Note 9 or OnePlus still priced the same YoY or seeing a marginal increase? Clearly its a Apple problem.

1. All of us are saying iPhones are too expensive for Indians. That’s what you’re saying too.

The reason behind that isn’t the topic for discussion.

Whether or not people will buy USD 2000 smartphones in India is the topic of discussion.

2. To answer your question that’s off topic:

Everybody except Apple makes their phones in India.

Everybody else makes no money per day selling smartphones in India. They are hoping to make money in the future.

 

[kshitijshah]

D

There was a report that stated the below:

OP has 45% of the > USD 400 market in India. Apple has 12%.

But in the > USD 600 market Apple has 72%.

And yes this makes perfect sense. If you don’t understand then this is simple math. These claims aren’t contradictory at all.
[doublepost=1545212141][/doublepost]

He’s doing the right thing. Apart from a few fanboys, most Indians who purchase 1-1.5L smartphones also shop at those brands.
[doublepost=1545212216][/doublepost]

Non sense.

This price increase is there in USA and EU too.

All of those Google apps work just fine on iOS too.

And there is no proper ecosystem or it’s demand thereof to speak of in India.

It’s a simple money issue. That’s it.

oes

1. All of us are saying iPhones are too expensive for Indians. That’s what you’re saying too.

The reason behind that isn’t the topic for discussion.

Whether or not people will buy USD 2000 smartphones in India is the topic of discussion.

2. To answer your question that’s off topic:

Everybody except Apple makes their phones in India.

Everybody else makes no money per day selling smartphones in India. They are hoping to make money in the future.

The point is iPhones are MOST expensive in India compared to the world and there isn’t an ecosystem or investment from Apple backing those prices.

Hence the point is iPhones don’t sell in India not because of a demographic problem but because of an Apple problem.

And OnePlus does make tons of Money in India. Apple doesn’t have manufacturing in a country which it sees as the next growth engine is Apple’s problem especially when every other phone manufacturer has local manufacturing. Apple wants special treatments and special concessions from the government which is their problem.

I’m sure apple would make a better return on their cash hoard by investing in india for the future rather than keeping it in a US bank at one percent yield.

 

[MacBH928]

I can see where Apple is coming from, if they can only score 5% of the market which would equal to 50 MILLION customers that would be a huge success, that being said they will also be losing the other stingy 950M customers which will opt for the Oppo and Huawei options.

 

[ROGmaster]

There was a report that stated the below:

OP has 45% of the > USD 400 market in India. Apple has 12%.

But in the > USD 600 market Apple has 72%.

I don't know what report you are talking about but the one I mentioned is +500$ without an upper limit.
Also OnePlus phones start at 550$ and go above 600$ and in India there are a lot of phones available in the 400-600$ category. Like I've said your claims don't add up.

And yes this makes perfect sense. If you don’t understand then this is simple math. These claims aren’t contradictory at all.

They don't add up because you insist on ignoring the huge decline in sales and market share Apple has been experiencing in India in this last year. That shows that Apple is now squeezing the max they can out of the indian market with their current prices like you claimed.

 

[Breaking Good]

Apple is NOT trying to offer a product line across the entire socio-economic spectrum.
They discontinued the S, and no replacement has been released. The cheapest NEW phone is $750.00 for the basic one. That is NOT AFFODABLE by any means. They are offering the iPhone 7, a 3 YEAR OLD PHONE, as the entry level so called "affordable" phone. So the only spectrum Apple is trying to cover is the middle upper, the upper and the ultra upper class.

That depends on where you buy your phone. Apple is a master at marketing.

Last August AT&T Prepaid was offering an iPhone SE for $49 with a new line of service. Cricket Wireless just offered an iPhone 7 for $149 with a line transfer.

The issue isn’t the age of the technology, it’s how does the phone compare to other similarly priced phones.

An iPhone 7 and an iPhone XS Max May offer different experiences, but both run iOS 12 and both give you access to Apple’s “iCosystem”.
[doublepost=1545216603][/doublepost]

Wow, you don’t value your time enough to get the best? If you spend any time on your phone daily it’s easily affordable! Next year will you buy a used iPhone, Doc? Seems like a mistake in my humble opinion. You spend over $1000.00 per year just for you cell phone service plan right?

What can you do with a $1,000 phone that you can’t do with a $300 phone? They both call. They both text. They both can send and receive e-mail. Both take selfies.

Do you go buy the most expensive toaster to toast your bread because you can, or do you buy the cheapest toaster that can toast your bread the way you want it?