iPhones have been a rage ever since Steve Job introduced the product line more than a decade ago. Everyone seems to be in love with the device in spite of its hefty price tag. However, as it can be seen from the falling iPhone sales in India (and worldwide), the fascination isn’t translating into actual purchases like it used to.
There is a growing concern about the performance of Apple in the Indian market. And rightly so. There’s been a drastic drop in the number of Apple’s iPhone shipments to the country. According to the projections made by Counterpoint Technology (a Hong Kong based market research firm), Apple India’s iPhones shipments stagnated at 1.6-1.7 million units in 2018. Cybermedia Research quoted a slightly better number at roughly 2 million iPhones. While the numbers don’t look too bad on their own, there is quite a noticeable drop when taken in perspective of the previous year’s figure. Just last year, in 2017, 3.2 million iPhone shipments were made to the country.
What, you ask, is the reason for the slump?
Blame the prices. According to analysts, intense competition from other brands and the not-so-affordable price tags of the new iPhone models are at play. Despite various offers like EMI schemes, zero down-payment, and cashback plans, Apple India has failed to attract smartphone buyers. Even price drops for older models like iPhone 8 and iPhone 7 haven’t helped much.
There’s no arguing that Apple commands a huge brand value but there are other brands out there with similar (or even better) features at half the price! There really isn’t much mystery as to out why Apple’s competitors, like OnePlus, is doing better in the price-senstive Indian market.
According to Neil Shah, research director at Counterpoint Research, Apple has reportedly shipped around 400,000 iPhones in October-December. OnePlus, on the other hand, has grown its hold in the premium segment, shipping an estimated 500,000 units. He said, “Apple had been rising every year until 2017… the 2018 shipments will be at the level of 2014-15, setting them three years back in a market that has grown 50% between 2014-15 and 2018.”
Apple’s Current Status in India
Apple CEO Tim Cook admitted in an interview to CNBC last week that although Apple India’s business grew from $100-200 million to over $2 billion in a matter of few years, after 2016, there has been no growth.
Despite the results, Cook stated that Apple still considers India an important market and that it wants to do better in the future. He added that they want to open their own stores in the county and would like duties on their products to be reduced.
Prabhu Ram, Head – Industry Intelligence Group at Cyber Media Research said, “For Apple, 2018 has been a disastrous year in India… while Apple is still the favoured aspirational brand in India, it has definitely slipped. In comparison, the Android smartphone market in India is one that is thriving and full of innovation.”
Future Doesn’t Look Too Promising Either
In a move that could result in cost savings – for both the company and its consumers – Apple India has reportedly formed a deal with Foxconn Technology Co. this year to assemble its top-end phones in the country. But Counterpoint’s Shah said, “Local manufacturing won’t move the needle much since Indian consumers are happy with offerings by OnePlus.”
He also added that Apple doesn’t plan on slashing the prices as Apple India doesn’t want to lose brand equity. That can prove to be a not-so-smart plan by Apple almighty knowing that they face stiff competition from the likes of OnePlus and Samsung and that the consumers are moving to other brands due to its better features and affordable prices.
With 2019 just starting, it remains to be seen what plans Apple India has to win back its iPhone customers. Balancing affordability with the premium positioning is a tricky business, but unless Apple finds the sweet spot, competition will continue to chip away at their market share.