Are you an Apple fan living in India? Count yourself in the minority. India may be the third largest smartphone market, but there’s no reason for Apple to be happy about the bigger pie.
The company’s huge marketing effort over the past six months has resulted in a small explosion of iPhone 4 sales, but higher-margin devices such as the iPhone 4S and the iPhone 5 remain the choice of a few well-heeled individuals. The choice of the word well-heeled is entirely ours but it lends itself very well when understanding why Apple is still only lukewarm in India.
High-quality design, great user experience, but too pricey
The fact that India is a price-sensitive market and Indians are budget-conscious shoppers for all product categories, makes Apple’s premium proposition a hard pill to swallow. In fact, Apple is so rigid on the policy that even when other smartphones become less expensive a month or two after launch, iPhones retail for the same price till a new generation model takes its place. The well-designed, highly-optimised devices that Apple launches in India find very few takers, primarily because of the price hurt. But the price situation has changed in the past year and even this hasn’t helped the company.
Apple set its prices for India when the dollar was around the Rs 50 mark. Since then the pricing has remained the same for all new iPhones with only minor increases or decreases. This, even as launch prices of competing Android flagships have steadily risen over the years and have come closer to the iPhone mark, examples being the launch price of the HTC One (Rs 42,900) and the Galaxy S4 (Rs 41,500). At one point, a Samsung flagship could outsell a contemporary iPhone in India riding the price advantage, but that no longer is the case. Despite this, Apple is not making headway in the market, something which should be of great worry for the company.
Apple tried to shield Indian wallets from this premium by offering exchange discounts, cash-back offers and EMI schemes. All this in just the first half of this year and it worked wonders for the two-generations-old iPhone 4. Despite the iPhone 4 success, the overall sales in the first three months of the year have been anything but encouraging. The Economic Times reports that between January and March this year, the Cupertino-based company sold some 120,000 iPhones in India. That’s only a little more than half the total amount sold in the October-December quarter of 2012, according to IDC numbers. This meant Apple’s market share fell from a decent 4.7 percent to 2.1 percent— lower than Sony, Nokia and a number of Indian brands.
The new Macbook Air range starts from Rs 67,900 for the entry-level model
Besides being too expensive, Apple’s products always have had a history of being annoyingly late coming to India. This has changed over the years, but one can’t shake off the feeling that India is not a priority for Apple. The situation has improved these days with Apple launching their non-mobile devices (Macbooks et al) not too late after the US launch, but new iPhones and iPads still arrive in India later than most other countries, often after the initial hype has died. At least, nowadays Indian users don’t have to pay the full price for products at the end of their life cycle (like what happened with the first-gen iPad and iPhone 3GS, which arrived nearly a year after their launch in the US).
In contrast, other manufacturers give top billing to India when it comes to flagships and other high-end devices. The Galaxy S4 arrived in India a little over a month after its official announcement and even the HTC One is now readily available after a month’s delay in launch.
You might run into the odd Apple nut here, but rabid Apple fandom that’s seen in other countries has skipped India. Indians love camping to get the first Tatkal ticket or get a leg up in the school admissions queue, but lines outside an Apple store for first dibs on a new iPad or iPhone are still exceptional, and anything but ordinary. One reason could be that Apple has never seriously tried to cultivate an Indian fanbase. This is evident in the lack of Apple Stores in the country, which can be considered the fountain that "iSheep" drink from.
No queues outside Apple Stores; no Apple Stores
If you look back to the PC wars too, India’s lack of love for Apple is clear. Indians adopted Windows and Linux by the millions, but the Mac remains a rare sight. Ironically, this elusiveness has made the Mac (both iMacs and Macbooks) a status symbol. Even the early colourful iMacs, sold in India via the reseller network, never did well. High-end Mac desktops and the fully-loaded Macbook Pros are seen as the preserve of the few who need it for intensive tasks like visual graphics and video editing.
The frustrating part for Apple must be that even as competing phones get more expensive, Indians prefer them over Apple’s iPhone. As we have seen, even Android smartphones are routinely breaking the Rs 40,000 price barrier, but Apple still is the second or third choice in that range. While Brand Apple is a force to reckon with in many Western markets, the company has to rethink about how to educate Indians about the brand. This will be the bigger challenge and it’s going to take more than a lucrative EMI scheme to do that.