For a few years now, Apple has been trying to get into the huge Indian market using a special approach.
Unfortunately for the manufacturer, his hopes did not materialize and the results are not very good. Worse, in 2018, the American giant suffered a severe setback in this booming market.
Indeed, India is not competing today with China, the US or Europe with 145 million smartphones delivered last year (80 million in 2014). But with a 10% increase and as global growth declines and the recession takes hold in China, India is emerging as a growth driver.
Selling old products: it doesn’t work
According to Counterpoint, Apple has seen its deliveries to India drop by 50%. Apple’s sales in the country had already shrunk. In 2018, they were even more so with just 1.7 million iPhone sold, compared to 3.2 million a year earlier.
Is it due to a too small high-end segment and limited purchasing power? Not so sure, or at least not only. Because as the firm points out, another manufacturer, which entered the Indian market late, is currently gaining the lion’s share.
In the first half of 2018, OnePlus replaced Apple and Samsung to become the leading manufacturer in the premium segment, i.e., smartphones with 30,000 rupees or more ($420 and more). It is a performance in a market where the average purchase price of a smartphone is around $150.
Top of the range, however, is Apple’s preserve the market in most countries. In India, where more than 700 million people already have a mobile phone (most of them still a feature phone, at 56%), the iPhone is not the current benchmark for premium.
Premium 50% cheaper at OnePlus
A bad omen for Apple’s development in a market whose size should put it ahead of the United States? The strategy put in place by Tim Cook’s firm has not yet taken off, and the wealthy Indian class is turning mostly to other manufacturers.
More recently, Apple has tried to popularize and sell the iPhone XR. Problem: the smartphone cost more than 1,000 dollars, 40% more than its price in the US. This price makes competing products even more attractive.
OnePlus 6 offers smartphones equipped with the latest technologies, at half the price of an iPhone. Despite this setback, and the announcement early this month of the first earnings warning in the past ten years, Tim Cook remains “very optimistic” about the country’s growth prospects.
However, there is nothing about how the multinational plans to take advantage of these growth prospects. The only certainty, Apple will not produce a specific and cheaper iPhone for India. The CEO also points out that the company’s activity in India now represents more than 2 billion dollars.