The news that Apple iPhone's sales dropped 35% in India the last quarter has been posted by almost all the blogs in the last couple of days (Strategy Analytics via 9to5mac). I have to say that I am a little disappointed that even some reputed sites have posted some shoddy half-baked headlines and reports on this topic! Here are some of my points on this (again) and I will let you guys form the complete picture, yourselves.
- India is very different from the Western countries and even different from China, when it comes to smartphone customers. I have tried to point out these differences in the past in this blog. Customers are very cost minded.
- Apple has tried a variety of tactics so far like the iPhone 5C, refurbished higher cost iPhones sold for lower cost, etc. But in my mind these have not been efforts dedicated to a single cause. It was a like a hobby trying to see what might work without too much effort. While these worked to an extent they are not sustainable.
- Tim Cook has been pretty active in trying to strengthen Apple's presence in India in the last few months. But these efforts don't pan out in a month, not even in a quarter, it takes a while before things start turning around. I mean there are not even one Apple store in such a vast country, at least not yet.
- Apple's latest iPhone, the iPhone SE is an effort in the right direction towards this cause. Its very simple Apple cannot have its cake and eat it too. Apple needs a new strategy to gain more customers in India. Apple traditionally has been trying to lure cost conscious customers first into its ecosystem through older generation or refurbished iPhones and then once they are impressed and locked into its ecosystem, they will eventually start upgrading hopefully after they realize the inherent value in the iPhone. But this scale has to be lowered, lowered a lot for a market like India. If $549 or $499 was a low cost iPhone in the US, in India a low cost iPhone has to be even cheaper than that.
- Also Apple does not need a big market share in India. I mean Apple should be perfectly fine letting Android and its cheap so called smartphones take all the market share they can as there is no profit in that segment. All Apple needs to do it gain a few percentage points in market share and settle at somewhere around 3 to 5% as that itself cumulates to approximately 50 million customers (the power of large numbers).
- Look at the figure below and see how low the Apple market share numbers are. It was 1.2% last quarter and now its 0.8%. The difference in these two number which are already so low is of course going to sound crazy high, almost 35% decline! But these are just artifacts of an young market. Remember how the iPhone sales kept growing exponentially in the first few years of its release, this is the opposite of that. So to blow up this and claim doom for Apple in India, is just click baiting using a sensational headlines and nothing more.
- Finally iPhone is still a big status symbol in India. People want to have iPhones and the only reason they don't is because it is either too expensive or they think its too expensive. So for Apple to convince them otherwise, a dedicated effort on this front is essential and I am sure it is already en-route.