The recent Indian government’s diktat increasing the tax levied on the import of mobile phones from 10% to 15% may have already had its impact on Apple Inc’s Indian operations. Its head here Sanjay Kaul is reported to have resigned and may be relieved with immediate effect. Apple is passing through a loss in business in the Indian market and its overall market share in mobile phones is just 2.2%. Compare this with its global rival, Samsung with 22.8%.
Incidentally, on the very day this news of Kaul’s quitting came out, the company has already announced an increase in the prices of all its iPhone models, except one, by an average of 3.5% to offset the 5% increase in tax announced by the government. The fact is, this increase in tax puts extra pressure on the company’s Indian operations, since it has registered the slowest year-on-year growth in the last five years, the real reason for Sanjay Kaul’s leaving the post, it is being reported.
The problem faced by Apple is not difficult to understand. The company is said to be importing close to 90% of its mobile phones that it sells in India. It makes only one model, the iPhone SE, locally, at its Bangalore facility. While Apple is keen to ramp up the production and include other popular models, it was hoping that the government would give it certain concessions on the import duty, at least for a duration till it is able to develop indigenous vendors for various key components, but the government has made it amply clear that no such concession is forthcoming to favor a single manufacturer, however critical their investment may be.
The company has named Michel Coulomb as new head of sales for the country. Industry sources told IANS that Kaul who was elevated to the position in May last year has stepped down with an immediate effect. An official statement from Apple was yet to come.
According to Coulomb's Linkedin profile, he earlier led Apples operations in Middle East, Turkey and Africa before moving into Singapore last year as chief of South Asia. Coulomb has been with the Cupertino-based iPhone maker for over 15 years.
As things stand, it is only going to be tougher from hereon for Apple since this year also may prove to be another poor business performance year. The reason for this is that their latest launches, the iPhone 8 and the iPhone 8 plus have not evoked the same kind of demand among the buying public in India as did their previous models.
This has been revealed through inquiries with retail outlets which stock and sell Apple products. Unlike the normal trend where people used to place orders for iPhones and wait for its delivery, the retailers say they are holding stocks with no takers.
Making more devices in India is definitely the best option to fight on the price front and take on the competition, mainly comprising Xiaomi, Oppo and Vivo, apart from Samsung, who all offer cheaper Android-run smartphones.
As for Sanjay Kaul, it is reported that he may start his own venture, though not connected to the mobile phone business.
With IANS inputs