Apple Says It's Struggling To Sell iPhone In India, But It Really Doesn't Care

As shipment of the smartphone is slow globally so just like other phone vendors, Apple has to expand their business to India in the last couple of years to increase its customer base. But not like other phone vendors that are showing potential growth in India, Apple is still struggling to penetrate the market and the situation is not likely to change in the recent future.

Answering many analysts’ questions during earning call of Apply on Thursday, CEO of Apple Tim Cook said that their business in India was “flat” in the third quarter. But he stated that he is still positive about the market and what Apple could possibly achieve there. According to Counterpoint - a research firm, Apple occupied one percent of current Indian phone market share in the third quarter, 1 percent lower than the same period last year.

India market is a regular fixture in the quarterly earnings call of Apple. It is not a surprise as India is expected to have the world highest population in the future and also the second biggest smartphone market with the fastest growing rate. But even though Apple CEO keeps being optimistic about Apple’s situation in India for about 3 years now but it seems they are going now where.  

Tim Cook still remains optimistic about India market

Cook blamed the local import duty and the weakening currency for its poor sale figures of iPhone and other products of Apple in India, Brazil and also other developing countries. “These are markets where currencies have weakened over the recent period. In some cases, that resulted in us raising prices and those markets are not growing the way we would like to see,” Cook said.

The weakening currency is only one among the latest “speed bumps” that Apple has to face in India, according to Cook. During Apple’s earning calls, he made a suggestion that things may get better when the company starts opening stores in India. He claimed that Apple and Indian government have had productive discussions about it opening stores in the country.

The last time Apple made noise, they were hoping that the government would offer the company some special leeway. Many would argue that if they wanted to open Apple stores in the country that much, they would have done it the regular way just like other businesses.

Apple is trying to create more buzz about its products through the motivation for opening its stores in India. In the last few quarters, the iPhone maker is approaching with more aggressive marketing campaigns in India, with many billboards and countless images of iPhones everywhere in big cities.

But lacking awareness of iPhones is not the main reason for the low sale of iPhone in India, it is that Indian people simply cannot afford them. The GDP per capita in India is around $1,940 while new iPhone series is all really costly in India. For example, the retail price of the iPhone XS in India is $1,370 (Rs. 99,900) while it only costs $999 in the US.

During Apple’s earnings call, Cook also blamed the heavy tax of imported goods in India (which is the main reason for the higher price of iPhone in India) as one of the roadblocks for iPhone business to grow in the country.

But it is not just limited to Apple but also other international phone makers as well. They have already set up or had partnerships with Indian manufacturing factories to assemble their products locally. For example, one of the biggest competitors of Apple - Samsung has set up the biggest phone plant in the world in India.

Other smartphone companies’ commitments are starting to pay off and the India market is showing huge appetite. This week, Chinese smartphone brand Xiaomi announced its sale figure in India to be 12.1 million in just the third quarter alone, increasing from 9.2 million in the same period last year.

Xiaomi is doing very well in the India market

Canalys - a research firm revealed that 8 out of 10 biggest smartphone companies that have smartphone businesses in India saw a growth in the third quarter.

In the Q3, the smartphone market of India grew by 24 percent over the Q2 and that is the highest growth rate for the market, according to Counterpoint. Canalys and IDC estimated that the smartphone market in India occupied 11 percent of the worldwide market share.

Many people believe that Apple should ignore the profits for now and sell its iPhone in India at the same price as offered in the US. And that is even a common thing for any company to absorb some tax to set the equivalent price with the global market. Cheaper model of iPhone can also be a good option for Apple though Cook has already refused to take that idea in the past.

Apple has mostly ignored the iPhone consumers in India. For example, Apple Maps is almost not usable while Siri doesn’t work half of the time. A few Apple services like Apple News and Apple Pay are not even present.

Driving directions of Apple Maps are either not available or do not work in India

In conclusion, despite the huge potential of the Indian market, Apple may find it not worth lowering the iPhone prices or making other big commitments. It has long been raising the prices of its devices and gain higher profit. And the Indian market may not draw enough interest of Apple to change its trend.