Home
News
You are here

There's finally a glimmer of hope for Apple's iPhone in India

By Joshua Swingle

Published: Jan 23, 2020, 8:55 AM

2comments

iOS Apple

There's finally a glimmer of hope for Apple's iPhone in India

Apple might be one of the world’s leading smartphone manufacturers but it still hasn’t managed to crack India. The developing nation remains Apple’s largest untapped market although, following a long period of decline, there’s finally a glimmer of hope for the Cupertino-based giant in the country.

The iPhone XR was the best-selling iPhone in 2019

Citing market data gathered by Counterpoint Research, a new report by Bloomberg claims Apple saw iPhone shipments in India grow by 6% year-on-year throughout 2019. The results are far from incredible, but they mark a vast improvement over 2018 when iPhone sales plummeted 43%.

Apple had a rough start to 2019 in India due to the poor reception of the iPhone XS and increasing competition from rivals. Fortunately, it managed to salvage things hallway through the year with a $250 price cut to the iPhone XR.

The price adjustment quickly made it Apple’s best-selling iPhone in the country which, in turn, helped boost revenue as consumers shied away from older and cheaper models.

Apple has started shifting focus to newer models

In light of the positive trends last year, Apple has slowly begun “shifting focus from older-generation iPhones” such as the iPhone 7 or iPhone 8 to the latest models. The iPhone 11 was the first example of this because it debuted in India just one month after its global launch, significantly earlier than previous years.

This phone's lower starting price helped Apple “gain share during the festive season” and provided a big boost to sales for the entire fourth quarter. Apple is hoping the low-cost iPhone 9 will continue the trend once it arrives in March and sustain demand from local customers.

The new iPhone is going to pair the latest flagship processor and software with an older design based on the iPhone 8. It's an odd combination, but it should help keep pricing as low as $399, making it much more accessible to Indian consumers.

The phone will, however, still be considered a premium product in the region – the average annual per-capita income in India currently sits at $2,100 – and is expected to struggle when it comes to competing with rival Android products priced at $200.

To put the lack of demand into perspective, an impressive 158 million smartphones were shipped in India last year. Apple sold less than 2 million during the same twelve-month period, giving it a market share of just 1.2%.

These numbers are down by a quarter when compared to iPhone shipments in 2016, but market data suggests the premium segment is growing 20% per year, so Apple can easily grow if it learns how to compete locally.

The strategy for 2020 won't be that different

Apple’s strategy for India in 2020 isn’t expected to change too much, although it’s expected to continue trying to make iPhones more affordable to local buyers in a bid to boost interest.

It recently started offering zero-interest monthly payments to customers, allowing them to evenly spread the cost of a device over several months, and should gradually increase local iPhone production.

This will help it avoid the hefty 20% import duty imposed by the Indian government which, in turn, will allow it to cut retail prices. Nevertheless, the primary marketing focus should be the already-cheap iPhone 9 once sales begun.

The final part of Apple’s strategy this year involves physical locations. It hasn’t yet been able to build a store in the market but is continuously working with the local government to gain permission.