Apple Restructures Sales Team in India Amid Sluggish Growth

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Apple sold fewer than a million iPhones in India in the first half of 2018, according to Bloomberg. The company has suffered slowing sales in the world's second largest smartphone market, which has reportedly seen three high-ranking sales executives leave Apple as the company restructures its operations there.

Among the executives who've departed are its national sales and distribution chief, the head of its commercial channels and mid-market business, and the head of telecom carrier sales, said the people, who asked not to be identified discussing internal matters. Apple's Indian sales team is now undergoing a restructuring, one of the people said.
Apple has a 2 percent market share in India, according to Counterpoint Research. It sold 3.2 million iPhones in the country in 2017, but high tariffs on imported electronic devices continue to push consumers toward cheaper alternatives from Xiaomi, Samsung, and other phone makers. In February, India announced the latest tax increase on imported mobile phones from 15 percent to 20 percent, and that came under two months after the previous increase.

Last year, Apple started manufacturing the iPhone SE and iPhone 6S in India in an effort to exempt the phones from import duties and reduce their price, but the company's facilities have yet to start running at full capacity. Apple doesn't manufacture its latest iPhone models domestically, so they still incur import levies.

"iPhone India sales were weak in the first half of 2018 and, even if they show a big jump in the traditionally strong second half, Apple will still fall short of last year," said Neil Shah, a research director with Counterpoint who spoke to Bloomberg.

Apple CEO Tim Cook has made upbeat comments about the company's performance in the Indian market, despite Apple's sluggish growth and single-digit market share.

Cook believes that young, aspiring Indians will look to upgrade their devices as they move up the socio-economic ladder, but sales have yet to reflect that prediction. Apple has also faced criticism for the poor performance of core services like Apple Maps and Siri in India, suggesting the Apple ecosystem has yet to align well to the usage and value of Indian users.

Article Link: Apple Restructures Sales Team in India Amid Sluggish Growth
 

maflynn

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Wow that's surprising, they coveted that market for years and now they're struggling to get their phones moving ¯\_(ツ)_/¯
 
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anandhts

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Apple itself is a joke to Indians. No proper service for its iPhones, iPad , macs, etc. The pricing is high (iPhone 8 cost nearly $1000, entry level 15 inch macbookpro cost $3000) even though Samsung and other Androids do competitive pricing (<$1000 for high end). when my iPad Air 2 failed (couldn't charge) within 2 yrs of its lifetime, apple asked near 375$ to replace it without checking any fault. Till they take care of pricing and do proper service in India, people are not going to give a second glance at them
 

justperry

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Selling fewer than one million iPhone devices for a half of year in a country of over one billion prople? That needs courage.
Cause the majority is poor maybe.

When you price your premier iPhone X at 1.5x the US cost, don't expect miracle sales. Also no amount of shuffling or re-shuffling can ever get you sales as they are dragged down by insane high price.
Apple itself is a joke to Indians. No proper service for its iPhones, iPad , macs, etc. The pricing is high (iPhone 8 cost nearly $1000, entry level 15 inch macbookpro cost $3000) even though Samsung and other Androids do competitive pricing (<$1000 for high end). when my iPad Air 2 failed (couldn't charge) within 2 yrs of its lifetime, apple asked near 375$ to replace it without checking any fault. Till they take care of pricing and do proper service in India, people are not going to give a second glance at them
Restructure your prices apple. Android have decent phones for lower prices.
Seems like a few of you didn't read the article, it clearly says import taxes are high, so you have to (partly) blame the Indian government.
You can avoid those taxes by manufacturing the product in India but that not easy for a hightech product like the iPhone, nor for other Apple products like MacBooks and the like.
 
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neutralguy

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Maybe Apple thought people would buy it on monthly payment? Indians don't like to lease phones! Or for that matter anything. It's not the culture. They want to own it. Let's see how the restructuring would help.
 

LovingTeddy

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Cause the majority is poor maybe.







Seems like a few of you didn't read the article, it clearly says import taxes are high, so you have to (partly) blame the Indian government.
You can avoid those taxes by manufacturing the product in India but that not easy for a hightech product like the iPhone, nor for other Apple products like MacBooks and the like.
Then adjust price accordingly. People do not care about import tax or not, they are refusing to pay more, especially there are lot cheaper options out there.

In the end of the day, it is pricing that determines sales in developing nation. They have too much of other things to worry about, the last thing they want paying so much more for equal or marginally better product
 
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anandhts

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Jan 15, 2017
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Cause the majority is poor maybe.







Seems like a few of you didn't read the article, it clearly says import taxes are high, so you have to (partly) blame the Indian government.
You can avoid those taxes by manufacturing the product in India but that not easy for a hightech product like the iPhone, nor for other Apple products like MacBooks and the like.

Samsung and Sony doesn't manufacture their high end phones in India.. still they are priced accordingly..
 

TheShadowKnows!

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Maybe Apple thought people would buy it on monthly payment? Indians don't like to lease phones! Or for that matter anything. It's not the culture. They want to own it. Let's see how the restructuring would help.
Agree on the culture.
It is the outcome of either:
  1. Smart customers: Cash-and-carry is always the proper way to go. OR
  2. Not freely-available installment loans: either available at usury-rates or with high-credit hurdles.
Tim Cook apparently lacks understanding of developing-countries' economies when says:
"... Costs Less Than a Coffee a Day."

In what Galaxy?
iMessage to Cook: Not in most countries.
 

kdarling

macrumors P6
Seems like a few of you didn't read the article, it clearly says import taxes are high, so you have to (partly) blame the Indian government.
You can avoid those taxes by manufacturing the product in India but that not easy for a hightech product like the iPhone, nor for other Apple products like MacBooks and the like.
As noted in the article, Apple does manufacture some older, less expensive, iPhone models in India.

As for the idea that it's too "high tech" to manufacture there, it should be no different than doing it in China.
 

HighRes15

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Mar 19, 2011
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Cause the majority is poor maybe.
There are a billion cellphones in use in India, of which approximately 350 million are smartphones. They have 300 million people whose primary gateway to the net is a mobile device .

It’s fair to say the problem isn’t them . It’s Apple and their inability to offer anywhere as much value as android does to that market .
 

AmazingRobie

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Jun 10, 2009
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This is very good news and for those who disbelieve that all of Apples sales numbers in the U.S. are dependent on the carriers and bulk retail outlets like Walmart stocking up on units you can consider this as your proof...
 

justperry

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I'm a rolling stone.
As noted in the article, Apple does manufacture some older, less expensive, iPhone models in India.

As for the idea that it's too "high tech" to manufacture there, it should be no different than doing it in China.
Do they really manufacture iPhones there or just assemble.
India is not China by far.
Just an example of the above, how many times you see products with a "Made in India" label, guess what, almost never.
More or less similar to Indonesia (And I lived there for quite a few years) you'll see few products which are made in Indonesia, especially high tech products.
 

JPack

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As noted in the article, Apple does manufacture some older, less expensive, iPhone models in India.

As for the idea that it's too "high tech" to manufacture there, it should be no different than doing it in China.
Even the U.S. doesn't have the labor skill to manufacture something as "simple" as the AirPods.

Tim Cook indicated Apple partnered with Luxshare-ICT in China to co-develop the AirPods. It's not just about assembly, it's about designing for manufacturing, which India doesn't have any history of doing.

Right now, the iPhone SE is being assembled in India based on kits sent from Wistron in China.
 

NMBob

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"Apple has also faced criticism for the poor performance of core services like Apple Maps and Siri in India, suggesting the Apple ecosystem has yet to align well to the usage and value of Indian users."

The ecosystem doesn't align to you, you align to the ecosystem.
 
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JPack

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There are a billion cellphones in use in India, of which approximately 350 million are smartphones. They have 300 million people whose primary gateway to the net is a mobile device .

It’s fair to say the problem isn’t them . It’s Apple and their inability to offer anywhere as much value as android does to that market .
In 2017, customers in India bought:
  • 127 million smartphones
  • 164 million feature phones
In other words, the majority of consumers in India still aren't ready for a smartphone, much less premium smartphones from Apple.
 

macintoshmac

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Wow that's surprising, they coveted that market for years and now they're struggling to get their phones moving ¯\_(ツ)_/¯
The reason being exorbitant pricing right about 2016 onwards. Really a dampener. Considering they make these things in our neighbouring country, we should be able to enjoy cheaper products, but no. My 2016 MBP 13" with Touch Bar 8GB/256GB i5 2.9 cost me a little over $2300. This pricing was insane. Same goes for iPhones, they price them really high here, there is no way they will penetrate the market.

There was a period when they had priced the products according to the US prices, just a shade above, and that is the period when the company had a better run.
[doublepost=1531770049][/doublepost]
"Apple has also faced criticism for the poor performance of core services like Apple Maps and Siri in India, suggesting the Apple ecosystem has yet to align well to the usage and value of Indian users."

The ecosystem doesn't align to you, you align to the ecosystem.
What? Seriously? This is .... sad to read.

I'd like to see you try your hands at a phone with native apps not optimised for your demographic. You clearly do not know what you are talking about.
[doublepost=1531770280][/doublepost]
When you price your premier iPhone X at 1.5x the US cost, don't expect miracle sales. Also no amount of shuffling or re-shuffling can ever get you sales as they are dragged down by insane high price.
Yes, this. Pricing ridiculously higher. People here prefer to buy from abroad and use it locally.
[doublepost=1531770757][/doublepost]
Agree on the culture.
It is the outcome of either:
  1. Smart customers: Cash-and-carry is always the proper way to go. OR
  2. Not freely-available installment loans: either available at usury-rates or with high-credit hurdles.
Tim Cook apparently lacks understanding of developing-countries' economies when says:
"... Costs Less Than a Coffee a Day."

In what Galaxy?
iMessage to Cook: Not in most countries.
Loans are readily available to anyone with over $300 salary a month to begin with. Thing is, the jacked up prices compared to other countries. The EMI culture is gaining a strong foothold in the country since some years now, but it has not benefitted Apple because of seriously high prices.

There is a lower bracket which thinks that something similar is being offered at $100-200, why pay twice for an iPhone model.

There is another bracket that will pay for a medium priced SE/ 6s at $300- $400 and will buy an Apple product.

There is then that bracket which can pay that $400 but will see that for the same money, while others are giving larger screens and more features, Apple is giving years old hardware.

Then, lastly, there is that bracket which will buy the model they want to buy, completely informed, be it an SE or the highest end X, but will pay grudgingly because they know they are being fleeced in pricing and if they buy from abroad, they will lose out on warranty (phones).

Here, people want the most value for their money. They are not shy of spending. They are just about value for money. The teens would ask friends to buy from abroad. Anyone going abroad will buy and bring for family. They choose to forego on warranty because of the jacked up pricing. Money is not a problem for the market Apple targets. The value that Apple provides for that money is.
 
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JPack

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The Economist: India’s missing middle class

In short, there is a tiny middle class in India. The typical middle class Indian considers a $1,000 Honda scooter a luxury item which is paid on credit.

Only 85% of the population in India has access to electricity. India's literacy rate is 74%. Due to traditional gender norms, only 1/4 of the women in India are working.

Whether an iPhone X is priced at $999 or $1,499 is irrelevant for most Indians.

(An iPhone X costs US$1,270 in India from Amazon, inclusive of all duties and taxes. This is less expensive than buying in the U.K.)

Indians simply are too poor to afford Apple products. Though many Indians are too proud to admit it.
 

macintoshmac

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May 13, 2010
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The Economist: India’s missing middle class

In short, there is a tiny middle class in India. The typical middle class Indian considers a $1,000 Honda scooter a luxury item which is paid on credit.

Only 85% of the population in India has access to electricity. India's literacy rate is 74%. Due to traditional gender norms, only 1/4 of the women in India are working.

Whether an iPhone X is priced at $999 or $1,499 is irrelevant for most Indians.

(An iPhone X costs US$1,270 in India from Amazon, inclusive of all duties and taxes. This is less expensive than buying in the U.K.)

Indians simply are too poor to afford Apple products. Though many Indians are too proud to admit it.
You should read the sales figures of two wheelers in the country. This article is written to drive a point. I am a writer and I know it when I see it. You might pass it off as being too proud to admit anything, but I am not one of those, was not brought up that way.

Like I said earlier, the ones too poor for a phone, they have their set of options. The ones who can afford an iPhone do not see the value in paying premium price for a product that is 4 years old. Few will grudgingly pay more than the top dollar for a flagship Apple product. This has got everything to do with perceived value and nothing with affordability (talking of the people who would consider an iPhone in the first place).
 

JPack

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You should read the sales figures of two wheelers in the country. This article is written to drive a point. I am a writer and I know it when I see it. You might pass it off as being too proud to admit anything, but I am not one of those, was not brought up that way.

Like I said earlier, the ones too poor for a phone, they have their set of options. The ones who can afford an iPhone do not see the value in paying premium price for a product that is 4 years old. Few will grudgingly pay more than the top dollar for a flagship Apple product. This has got everything to do with perceived value and nothing with affordability (talking of the people who would consider an iPhone in the first place).
Do Indians "perceive value" that differently from other people in the world?

Excluding U.S. and Canada, the iPhone X sells for about US$1,200 in every other G20 country whether it's China, South Korea, or Mexico.

India has the lowest PPP GDP out of the G20 countries. Either Indians are extremely unique in their perception of value, or many are struggling to meet even basic necessities. In other words, affordability is a big problem.
 
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