Apple should fear losing its Indian customers
Arguably the biggest smartphone maker in the world, Apple, has been at the centre of the innovation and growth seen by the smartphone industry in the last decade. From the revolutionary, multi-touch display-equipped first generation iPhone to the bezel-less iPhone X, Apple never fails to bring devices that not just impress, but also become hits that leave in their wake legions of enthusiastic fans.
Suffice to say that at the various markets Apple operates in across the globe, it enjoys brand loyalty that none of its rivals can match. And understandably so. There is a distinct charm to Apple's phones that sets them apart from the crowd, helping define them as not just pricey smartphones but gadgets you aspire to own. However, if there's one market where it can be argued that this charm is waning, it is India.
Curious case of misleading figures
Even though India remains one of the fastest growing markets for Apple — it clocked a solid 17 per cent growth as its revenue shot up to Rs 11,619 crore ($1.8 billion) in the financial year ending March 2017, compared to Rs 9,937 crore in 2016 — a look at the larger picture exposes the true reality of brand's rise in the country.
With India's market growing at a brisk pace and recently overtaking the United States to become the second-largest smartphone market in the world, the last year has seen almost all smartphone makers carry out great business in the country. Popular budget smartphone maker Xiaomi – which only started operations in India in 2014 – announced a 328 per cent jump in revenues earlier in the year.
Samsung, on the other hand, has also shown strong growth as it moved closer to the $10-billion revenue mark. In comparison, Apple's 17 per cent growth in revenue — down from 53 per cent in the previous fiscal — only makes it look like a giant which is punching way below its weight.
Though it cannot be denied that an economic speed bump in the form of demonetisation played a part in slowing the tech giant's growth in the country, ignoring the fact that there were other factors too at play – most of which could have been controlled by Apple – would be very wrong.
Apple's flawed pricing strategy for India
When Apple unveiled the iPhone X on September 13, it did so with the knowledge that the "futuristic" device announced to celebrate the tenth anniversary of the first iPhone could reinvigorate the company's fortunes. Placing its bets on the device, the tech giant announced the phone starting at $999. Not only did this price mark it out as the most expensive iPhone till date, but also the most expensive phone in the market — one that even dwarfed the $930 price of the premium flagship king, Galaxy Note 8.
The idea was clear. The iPhone X, much like its predecessors, was a not merely a phone but a luxury product with an aspirational cost that would reflect in its price tag. And to be honest, the $70 (approx Rs 4,500) difference in price did make sense for a device that brought with it not just a fresh design, but also brilliant cameras and the fancy FaceID tech. But by the time its price was announced for India, it became clear as to how serious Apple really was about "one of its fastest-growing" smartphone markets.
While Samsung made India one of the most affordable markets to get the Galaxy Note 8 from, with the phone priced at Rs 67,990, Apple saw it fit to make India the most expensive market to buy the iPhone X from. Starting at Rs 89,000, the entry-level variant of the iPhone X in India was 40 per cent more expensive than in the United States.
And if you thought this wasn't enough, citing an increase in import duty, Apple today (December 19) has bumped the price up some more, bringing it to Rs 92,430 for the 64GB variant and Rs 1,05,720 for the 256GB one.
Lack of focus on India
But it is not just the pricing strategy that is behind its decline in India. To date, Apple's ecosystem of products and services in the country falls way below the mark when compared to the setups in other markets. Case in point, the supporting cast of products like the HomePods which to date have not been announced for launch in India. But, if only that's where the problems ended.
While other big and small players have set up manufacturing and assembling units in India, Apple is still dragging its heels, and haggling with the government to get a good deal before it makes up its mind on setting up manufacturing units in the country.
The Print had earlier reported that Apple wants full duty exemption on manufacturing and repair inputs, capital equipment, parts and consumables for smartphone manufacturing and service and repair for 15 years. The company needs these concessions irrespective of whether it is making or repairing phones for India or for export.
The rising Android threat
Then there's also the ever looming Android threat. With Android OS growing at 4.3 per cent in the big five European markets, 8.2 per cent in the US, and 7.5 per cent in Japan during the August-October 2017 quarter, these already look like very difficult times for the Cupertino-based tech giant which was once the undisputed king of the smartphone market.
India, with its emergence as a growing market for smartphones, could very well have been a happy hunting ground for Apple, but with the company not doing enough to consolidate its position in the country, and Android smartphone makers already enjoying great market share, it increasingly looks like Apple is only moving away from the limelight and towards the periphery of the smartphone market of the country.
Apple's pricing, lack of focus on the market and the Android threat have all contributed to it fast turning into an unapproachable and for some even an undesirable brand in India. And that is a very worrying trend.
Apple needs to find a fix for the situation, and that too quick. Much damage has been done. It's time that the tech major ensured the situation doesn't worsen — it must steer clear of playing the game of continually increasing the prices of its already expensive phones in India.