iPhone sales quadruple in India, but gap remains

By , Feb 8, 2013

Apple-Retail-India

When it comes to Apple’s push to enter emerging markets like China, India’s huge pool of consumers has largely been overlooked. Indeed, one of that country’s leading newspapers charged Apple has “ignored” India, until recently.

From adopting the Indian rupee in the App Store to including local musicians in iTunes, the company has increased sales by up to 400 percent in four months. However, Apple still faces a large gap: only ten percent of India’s residents own a smartphone and rival Samsung is the clear leader, researchers say…

A profile by the Times of India of Apple’s recent efforts to improve its standing in India notes the smartphone maker has a “negligible share” of the local market, a claim that jives with previous reports.

However, an “extensive advertising and marketing campaign” has resulted in a quadrupling of Apple sales within the past 3-4 months. The number of Apple ‘feet on the ground’ in India has jumped to 150 from only 30 a half-year ago.

With only ten percent smartphone penetration, India’s affluent market is a green pasture for growth. By comparison, mature markets such as North America and Western Europe have smartphone penetration of around 50 percent.

Unlike China – which is attracted to low-cost alternatives – Apple can sell its iPhone, although the company needs to adapt to local standards.

iPhone 5 (introduction video, white, perspective 001)

Since launching the iPhone 5 in India on November 2, Apple has made changes to its two key stores for iOS devices, as well as music and media purchased through iTunes. The App Store now offers India’s consumers to buy iOS apps with the local rupee, rather than only U.S. dollars.

And early-December, Apple introduced sales of India’s local names on the iTunes Store alongside American and European artists.

But for Apple’s 22 percent market share to approach Samsung’s 29 percent, the company must make further changes, including partnering with local suppliers and merchandising networks, as well as considering installment plan purchasing of iPhones.

This was Tim Cook’s stance on India last summer.

One chain of stores there says Apple already began installment plan sales of the iPhone earlier this year. Such installment plan purchases are becoming more common in emerging markets, but also in the US.

The reason: it is “an effective tool for bridging the gap between value and affordability,” the CEO of India’s TheMobileStore retail chain explained.

Price has always been a knock against the iPhone in areas such as China. Instead of offering a cheap iPhone, Apple can distribute the overall price in more manageable chunks.

As we’ve reported, Apple is testing the new interest-free payment plan in China, where consumers are adopting Android handsets because of price.

Likewise, T-Mobile is said to be mulling over offering the iPhone in installment plans. T-Mobile USA confirmed it’ll become the fourth U.S. carrier to offer the Apple smartphone “in a few months”.

It did not take long for China to become Apple’s second-largest market so it’ll be interesting seeing whether India can supply a similar boost to the iPhone.

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  • http://www.facebook.com/kooolaj Anuj Mali

    I am From India With Iphone 5 :)

    Apple should think about India ……

    • Pmcaa TM

      You got iphone anyway good news

  • JoblessGuy2

    Indian here: A price reduction of some sort is necessary. Everything gets overcharged by AT LEAST $70-$100 here. I think I can call myself part of the upper middle class, and I can see myself buying a 32 GB iPhone at $800, but it’s plain unrealistic to buy a phone, irrespective of how good it is, at $1000. And as a result of that, even the MacBook Air prices push up to $1300 for the baseline 11-inch model. Not fair for us, given how many argue that even the prices in the US are too high as they are.

    A reduction in prices is needed and necessary for Apple to have any sort of control in a market where people would rather pocket an SIII and $300 instead of a phone whose major improvements over the past year (Apple Maps, Siri, 4G LTE, Passbook) don’t affect them AT ALL.

  • kunal

    iphones have a great demand in India. The reason why their sales lack is the late availibilty. Samsung’s flagship phones arrive much earlier. And the other being that they are availble only at selected authorised reseller’s shop. Where as samsung phones are sold by every local mobile shop

    • http://twitter.com/piyushr21 Piyush

      Late availability and also high prices , one iphone price is more than average salary of indian . Even iphone 4 (27000rs) is at higher price than galaxy s2 (20000rs) and many android phones , but if you compare quality ,iphone comes on top :).

      • luckyarcher

        How exactly does your average Indian manage to buy a Corolla which costs 10+ lakhs when it internationally costs just half this price? Blame the ‘luxury tax’ applied on everything. And yet, people still queue up to buy.

      • http://twitter.com/piyushr21 Piyush

        I know the tax are high but that is for indian companies could have a better competition with this multinational companies.

  • Pmcaa TM

    Loko guys

  • http://www.facebook.com/kenrick88 Kenrick Fernandes

    hooray , i like how IDB has been writing alot about India lately. I myself am from India
    There’s honestly great or should i say budding potential for Apple in India. The introduction of the Rupee in the app store and purchasing of movies and music in Itunes is f****** awesome to say the least. Either ways samsung will continue to own India for a while till Apple get their stores , logistics etc right.

  • http://www.facebook.com/friendlyraaj Rajkumar Ramadoss

    If we get the iPhone price as sold in USA, people will be in line to buy the iPhones. I will stand first.

    • Pratik Parab

      I totally Agree !!!

  • haridsv

    What is the source of your story? Did the TOI news actually say that the sales increased? I am just asking because, a lot of Indians who live abroad bring their old iPhones after they upgrade. Naturally, with the recent upgrade of iPhone 5, people must have brought their old 4 and 4s models resulting in increase of the usage share. Also those who can afford, usually have some one abroad who can buy outside and bring. I wonder how well the real sales in India are doing.

  • dan

    Stupid Indian’s just follow whats trending in the west….and I was one of those idiots until I dumped apple!

  • Pratik Parab

    Price was never a problem in India. but people here wants the most out of what they pay for. Even though iPhone got into Indian market pretty good, it still lacks behind in major value added application like Maps and Siri which are hardly of any use considering absent direction feature in maps and no local search in Siri. Which is pushing it back.

    • Satya Kumar

      Yes.. I agree with you Pratik. Apple should improve the Siri and Maps for India.

  • Lucky

    Apple should improve at 3pts.
    1. Service: not all apple products are covered under warranty, if bought from outside of India. This is really unrealistic. Suppose, you buy Factory unlocked iphone4s from ATT USA paying full amount at once and there’s any company defect in product. you wont even get your phone repaired by Apple.

    2. Price: All other companies are also paying so called taxes, but still manages to remain competetive. then why not Apple?
    3. Reaching to consumers: I think apple is also working on this aspect by improving availability at local stores and by offering customers to buy apps in rupees instead of USD/GBP.