Apple sold fewer than a million iPhones in India in the first half of 2018, according to Bloomberg. The company has suffered slowing sales in the world's second largest smartphone market, which has reportedly seen three high-ranking sales executives leave Apple as the company restructures its operations there.
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Among the executives who've departed are its national sales and distribution chief, the head of its commercial channels and mid-market business, and the head of telecom carrier sales, said the people, who asked not to be identified discussing internal matters. Apple's Indian sales team is now undergoing a restructuring, one of the people said.
Apple has a 2 percent market share in India, according to Counterpoint Research. It sold 3.2 million iPhones in the country in 2017, but high tariffs on imported electronic devices continue to push consumers toward cheaper alternatives from Xiaomi, Samsung, and other phone makers. In February, India announced the latest tax increase on imported mobile phones from 15 percent to 20 percent, and that came under two months after the previous increase.
Last year, Apple started manufacturing the iPhone SE and iPhone 6S in India in an effort to exempt the phones from import duties and reduce their price, but the company's facilities have yet to start running at full capacity. Apple doesn't manufacture its latest iPhone models domestically, so they still incur import levies.
"iPhone India sales were weak in the first half of 2018 and, even if they show a big jump in the traditionally strong second half, Apple will still fall short of last year," said Neil Shah, a research director with Counterpoint who spoke to Bloomberg.
Apple CEO Tim Cook has made upbeat comments about the company's performance in the Indian market, despite Apple's sluggish growth and single-digit market share.
Cook believes that young, aspiring Indians will look to upgrade their devices as they move up the socio-economic ladder, but sales have yet to reflect that prediction. Apple has also faced criticism for the poor performance of core services like Apple Maps and Siri in India, suggesting the Apple ecosystem has yet to align well to the usage and value of Indian users.
Top Rated Comments
Please listen to the folks from India who are here... they have made a lot of valid points.
Let's be honest, once you get hooked onto an Operating System unless its terrible suckie one finds it hard to move to a different OS. Apple is late to the party - they were busy trying to suck-up to the Chinese and ignored India and now the boat has sailed. There are just too many problems that Apple has been ignoring for far too long, and they have been listed above. Let me try and summarize:
1. PRICING: Apple has too much mark-up in India and has done NOTHING to compensate for Import Duty - all other vendors have ensured that their products sell at almost the same price as leading markets. the premium on Apple products makes it higher than competing products from Samsung, OnePlus 6, Xiomi, Pixel 2, etc.
2. SUPPORT: Apple support is terrible. I know a few Die-Hard Apple fans in India and they buy their Apple stuff in the US and take it back, however servicing these products in India is a HUGE PAIN - terrible service and expensive... so they bring it to US to get it fixed. How many people can afford that?
3. COMPATIBILITY: Apple products like iTunes work poorly in Windows OS. This has been going since years, and Apple has done crap to fix this. Hence the comments that the Tech geeks dont use Mac products, and dont endorse them. And the people who do buy iOS products find it hard to make them work without constant issues with the rest of the OS products. People who do get Apple products get fed-up with it.
4. OS: There was a time when iOS was amazing compared to android, however that gap has significantly narrowed. Android products that aren't loaded with any bloatware work well. Android users find it less compelling to learn a new OS.
5. OS UNIVERSE: Application Universe is pretty much the same between the two OS - let me qualify that... the big apps that most people use are available on both. The security concern with Android is lower now as people get more aware. A lot fo the new apps in India are now released first on Android... this includes new banking apps, ticketing apps, etc. And India is ahead of US in adoption of many of the new online functionality... lookup TEZ, PayTM, and many more similar apps.
6 APPS: Apps from Apple aren't HOT or compelling. In fact SIRI is terrible everywhere... and just not in India - cant compare it to Google Assistant which is way way ahead, as is Amazon (with Alexa). Google Maps are better and have a lot more details about India - this is just with the amount of focus Google has put on India compared to Apple thats busy making the next big thing... slimmer iPhone (which frankly no Apple user cares about another thinner iPhone).
With all this going on - Apple is toast. They will NEVER catch up with Google in India. And honestly the way things are going at Apple I wont be surprised if they become irrelevant by 2025. They aren't the most preferred product in the biggest markets in the world... and their product development is going downhill - the best they will do for new models is add OLED screen as standard, dual SIM, and make phone thinner... ALL YAWN worthy and not compelling enough for people to move over from Android. And on the S/W front SIRI will continue to suck, so their AI, home automation products cant be any better (cause they haven't yet even figured-our speech recognition... evident with how terrible SIRI is - forget about context, and making contextual recommendation and help). And to add to all this - Google with all its products have made it increasingly convenient for Apple users to switch to Android.
With all this, is it a surprise that Apple has abysmal sales in India? Does it really matter? perhaps its indication of the future of Apple.
Maybe Apple thought people would buy it on monthly payment? Indians don't like to lease phones! Or for that matter anything. It's not the culture. They want to own it. Let's see how the restructuring would help.
Agree on the culture.It is the outcome of either:
[LIST=1]
* Smart customers: Cash-and-carry is always the proper way to go. OR
* Not freely-available installment loans: either available at usury-rates or with high-credit hurdles.
Tim Cook apparently lacks understanding of developing-countries' economies when says:
"... Costs Less Than a Coffee a Day."
In what Galaxy?
iMessage to Cook: Not in most countries.