Faced with a massive fall in iPhone sales in India and other overseas markets like China, Russia, Turkey etc., Apple has been showing signs of desperation. They have been pushing promotions, offering exchange benefits, and even lowering the prices of the latest models. While these are short-term efforts, they’re also thinking of ways to sustainably increase iPhone sales without compromising on profits.
Why the Drop in Sales?
In case you’ve been living under a rock, let us reveal the most important reason for this drop in sales – ridiculous prices. The iPhone Xs Max comes with a starting price (or should we say, startling price) of Rs 109,900, while the iPhone Xs is at a comparably ‘conservative’ Rs 92,433. Lastly, the iPhone Xr is valued cheap enough to be outcast of an Indian family with a price tag of Rs 76,900 wonly!
Even at its ‘low’ price, iPhone Xr is close to double the cost of other premium smartphones, causing even the most hardcore Apple lovers in India to shy away from investing in one. According to CEO Tim Cook, there are a number of factors responsible for this:
- The first is the macroeconomic conditions being less than favourable in emerging markets. In his words, ”Weak macro-conditions in some emerging markets, was significantly more severe than we originally foresaw, especially in Greater China. That challenge was compounded by quarterly iPhone upgrades that were lower than we anticipated”. Basically, people are too broke to buy new iPhones and “are holding on to their older iPhones a bit longer than in the past.”
- The continued rise in the value of the US dollar is a major factor in why the current generation iPhones are so expensive. As Cook said, “The relative strength of the US dollar has made our products more expensive in many parts of the world. The foreign exchange issues amplified that difference in international markets, in particular, the emerging markets which tended to move much more significantly versus the dollar.”
- But in his opinion, the bigger problem is their battery replacement program which for millions of customers made it “inexpensive and efficient” to get their batteries replaced. Um Apple, sorry to break it to you, but that’s kinda your own fault for throttling iPhones with older batteries so don’t go thinking of it as something to put in your “kind things I did today” journals.
Tim’s Strategy to Boost iPhone Sales
Now that Apple realizes there’s a problem, they seem poised to take all possible steps to remedy it. While their proposed lowering of prices is still in the pipelines and we don’t even know if it’ll extend to the Indian market, here are some things that Apple is actually working towards:
- Apple India may start reducing their prices for third-party distributors in India, a step that they’ve already taken in China.
- Apple is attempting to open a manufacturing unit in India to reduce the prices by way of import duty. In addition to that Cook said that “We’d like to put stores there. We would like some of the duties and so forth that are put on the products to go away. And we’re working closely with the team there.” But to turn this into a reality, Apple must first get the tax relief incentives they’re seeking from the Indian government, so hopefully, that’ll go through and be equally beneficial to both parties.
- In further attempts to get the ball rolling, they’ve appointed Ashish Chowdhary as their Indian Operation head, a man whose prior experiences include being the Chief Customer Operation Officer for Nokia Networks.
All signs are pointing to Apple being dead serious about long-term growth in the Indian market instead of just looking for quick solutions out of the 2018 iPhone mess. And for good reason too. Cook sent a strong message by saying “India continues to be a critical market for Apple as the premium segment is likely to grow faster than the overall smartphone market.” Amen to that!