iPhone sales quadruple in India, but gap remains


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.