Ondrej Holzman India is currently one of the most interesting and at the same time important markets for technology companies. The fast-growing field is beginning to adopt the latest technologies in a big way, and those who catch on early are likely to secure high incomes in the future. That's why Apple has a big problem if it doesn't manage to establish itself in the Indian market.
Along with China, India is growing the fastest, and the executive director of Apple has emphasized more than once that he considers the Asian country to be a key area for his company due to its potential. Therefore, the latest data is from Strategy Analytics disturbing.
In the second quarter, Apple saw a 35 percent drop in iPhone sales, which is a major drop. Even considering that the Indian market as such grew by almost 2015 percent between 2016 and 30, and by 19 percent year-on-year in the second quarter.
[su_pullquote align=”right”]The Indian market is completely dominated by budget Android phones.[/su_pullquote]
While Apple sold 1,2 million iPhones in India a year ago, it was 400 less in the second quarter of this year. The lower figures mean that Apple's handsets account for just 2,4 percent of the entire Indian market, which is completely dominated by low-cost Android phones. In the much larger China, by comparison, Apple holds 6,7 percent of the market (down from 9,2%).
A similar slump in itself would not necessarily present such a problem as writes v Bloomberg Tim Culpan. Apple can't keep selling more and more iPhones in all parts of the world, but given the significantly growing Indian market, the drop is cause for concern. If Apple does not manage to get a good position in India right from the start, it will have a problem.
Especially when it is not certain whether Apple has any chance of breaking Android's dominance, at least in the short term. The trend in India is clear: Android phones for $150 and under are the most popular, with an average price of just $70. Apple offers the iPhone for at least four times as much, which is why it only has a meager three percent of the market, while Android has 97 percent.
The logical step for Apple - if it wanted to secure a higher favor of Indian customers - would be to release a cheaper iPhone. However, this will most likely not happen, because Apple has already rejected a similar step so many times.
Traditional cheaper deals subsidized by operators are not working very well in India. It is customary to buy here usually without a contract, moreover, not with operators, but in various retail stores, of which there are a huge number throughout India. The Indian government also blocks the sale of refurbished iPhones, which are also cheaper.
The situation for the Californian company is certainly not hopeless. In the premium segment (phones more expensive than $300), it can compete with Samsung, whose share fell from 66 to 41 percent in the first quarter of this year, while Apple grew from 11 to 29 percent. For now, however, cheaper phones are much more important, so it will be interesting to see if Apple manages to turn the situation in India in any way to its advantage.
What is certain is that Apple will certainly try. “We're not here for one or two quarters, or next year, or the year after that. We are here for a thousand years," said CEO Tim Cook during a recent visit to India, to whom the market there reminds the Chinese one of ten years ago. That is also why his company is trying to properly map India again and plan the right strategy. That is why, for example, in India opened a development center.
