Just a couple of days ago, Apple created history posting a quarterly profit of $18 billion. This certainly indicates that Apple iPhone is the single best-selling gadget in the market. While many international news websites never get tired of boasting the staggering performance of Apple, the fact is that Apple is still far behind in the race, especially in India.
Well, you might think that Indians are not tech-savvy and they don’t really care about brands. However, that’s not true. India is the second largest mobile market in the world right behind China. According to CMO Council report, India had 853 million mobile subscribers in December 2014. Apple gadgets are the ultimate social status symbol here and make you feel that you’re among the well-to-do people in the country. However, when you roam across India you will find more people using Samsung Galaxy smartphones than Apple iPhone. Many might argue that Apple continues to cater to premium users and that is probably one of the reasons why it has not been able to dominate the smartphone market, but I don’t buy it. Even top-of-the-chain customers prefer to use Samsung and other brands over iPhone.
Price factor certainly remains the key to make it big in the Indian market. Indians are always hungry for value for money deals and they will grab it up the moment they find one. For instance, Xiaomi flash sales shattered records as the company managed to sell over 100,000 smartphones in under 86 seconds. Of course, there are Indians that love expensive and premium smartphones, but that percentage is just a bite size of the larger chunk. Some blogs that I read on similar topic claim that Indian buyers are more focused on budget smartphones and I believe that is true. However, there exist another segment of consumers that prefer premium smartphones like Samsung Galaxy S3 and above.
The fact is that the price of the cheapest Apple iPhone that one can find in the Indian market right now is iPhone 4 that cost around Rs. 17,999 while 4S cost an extra thousand bucks over that at around Rs. 18,999. At this price point, Indian consumers can get some of the higher mid-range phones provided by Samsung, LG, Nokia (the Lumia series) and LG. Should I also say that Chinese smartphone companies like Xiaomi, Lenovo and One Plus have also captured a fair share of the Indian mobile market. Apple, on the other hand, launched what they claimed their “cheapest offering” Apple iPhone 5C which still isn’t exactly what Indian buyers would call cheap. The 8GB version of Apple iPhone 5C still cost around Rs. 27,499.
Another reason why Apple will have to stay content with the miniscule market share is that iOS is not quite popular in India. India is an Android nation, so if you don’t have an Android smartphone you are probably out of the league. You can take a look at Nokia’s downfall in the smartphone market, especially in India, when they decided not to go with Android and chose Microsoft Windows for Phone instead. Although, Nokia did try to come back into the market with the X-Series models that had a tweaked Android version (Android-Windows combo), but it was too late for Nokia. The damage was irreparable.
There is not much difference between the smartphone market in China and India, but Apple has still managed to grab some market space in China where there are more consumers for Apple mobile devices in the open market. On the other hand, India is more focused on the budget smartphones and low-end mobile devices that offer complete value for money. Some of the best-selling smartphones in India are in the price range of Rs. 7000 to Rs. 15,000 and Apple doesn’t have a single model in this price range. Apple’s CEO Tim Cook did mention that they are more focused on their profitability, rather than market share, but I am sure capturing the second largest mobile market of the world must be somewhere on his mind.
Currently, Samsung owns a major portion of market share and they have done that by offering budget smartphones that offer complete value for money and cater to all kinds of users. However, Indian and Chinese brands like Micromax and Xiaomi are quickly gaining momentum threatening Samsung’s dominance. While Apple might be the most valuable company in the world, it still remains far from capturing the Indian mobile market. The Cupertino-based company saw their sales dropping down last year. According to the Business Standard report, Apple currently has a mere 1.5% share (volume) in India in 2014, down from 2.4% in 2013. I believe that if Apple wants to stay in the Indian market, it will have to understand the gravity of the market conditions in India before it falls off the tree.