Why Apple will never penetrate the Indian smartphone market and why that’s okay
As it happens with all distant emerging economies in Asia, India is – for the most part – an entirely different world than ours. Different habits, differed ethics and cultures and most importantly different products. Hence, India is unaffected by Apple’s reign in the rest of the world. Why is that?
Before going any further, let me hit you with some hard facts to help me set the picture. The Cupertino giant has been on the top of its industry for at least a decade now, in the global smartphone market. Not only that, but it keeps presenting an ascending course, meaning that every quarter in Apple’s records is better than the last one, on a YoY (year over year) basis.
According to Strategy Analytics’ executive director, Neil Mawston’s report, “Apple iPhone captured a record 51 percent share of all smartphone wholesale revenues worldwide in Q4 2017”. Yet, the iPhone maker accounts roughly for 2% of the smartphone market share in India. So let’s ask ourselves again: Why is that?
India adds high tariffs to poor consumers
Let’s make sure you read that right. India’s consumer base is actually poor, meaning that the vast majority of the consumers have little to no money to spare on smartphones and other ‘non-essential’ goods.
So, imagine how the crowd reacts when the Indian government increases the average price of a smartphone by 15%-20% by adding tariffs and taxes; they obviously opt for a cheaper alternative.
And thankfully they’ve got plenty of those. From Xiaomi, the Chinese smartphone manufacturer that has taken Asia ablaze, to Micromax, an Inia tech company that is now gaining ground fast, there are at least a few dozen local smartphone makers that can fulfill the people’s needs.
Indians aren’t looking for a premium smartphone
Speaking of needs, that brings us to the second reason why Apple can’t seem to get a higher share of this country. Even the average consumer was able to afford an iPhone, they wouldn’t know what to do with it.
Today, we tend to focus so much on how fast the Indian smartphone market is growing that we forget it’s still surprisingly new. Up until 2015, only 26.3% of the consumer base owned a smartphone, according to statistics. That number has risen to 36% today. It goes without saying that 10% is a lot to grow in 3 years but it’s still a rather low percentage that gives away how new the average Joe in India is concerning the smartphone and its uses.
There are other contributory factors that explain why Tim Cook’s company can’t seem to prevail in the Indian smartphone market. For instance, the country still has trouble with its internet service providers. People mostly use a 3G signal to gain access to the internet. That’s why they’ve got so many companies that make and sell SIM cards solely for internet connection. Consequently, they tend to seek Dual-SIM smartphones.
In any case, Apple is more than okay with the current situation. You can tell, by how vaguely they’re trying to ‘bolster’ their sales in that part of Asia. It’s more like they’re just trying to keep a strategic position to make sure they can get leverage, should the market eventually allow them to do so.
And we should be thankful for that. Imagine how many resources it would take Apple to truly establish its presence in India. The company would have to invest in the country to create the right circumstances for its product. And then hundreds of millions of dollars would have to be spent on multi-channel marketing and promotional activities.
The result? Uncertain. The stakes, however, are certainly high. If Apple were to fail on that endeavor, the global smartphone market could be left with 51% gap. Keep that in mind the next time you take your iPhone for granted!