Apple will enter into separate agreements with dealers to incentivize them appropriately.

Apple to rework its India strategy with deals new stores and improved apps
Atom Technology Wednesday, August 08, 2018 - 17:04
Written by  S. Mahadevan

Apple Inc. has joined a long list of transnational corporations that have found the Indian market a lot different from what they had bargained for, when they made an entry in the market. But the tech giant is not giving up and is now trying to rework its strategy. Bloomberg has published a detailed analytical report on the basic issues the company faces in pushing its iPhones in the country, and how it is formulating its steps to reverse the trend.

Bloomberg’s report first highlights the pricing issue that confronts the iPhone models in India. That the Indian market is price-sensitive is no secret and it is also a well-known fact that Apple believes in pricing its products a notch higher than rivals, though it has sent out enough feelers in the past few months that it is seriously considering launching lower-priced phone models too. In the Indian context, the report points out that the average price point preferred by the buyers is around $150 (Rs 10,000), whereas the lowest price at which one can buy a new iPhone in India is $300 and that too is an outdated SE model assembled in India. Under the circumstances, Apple can hardly have any realistic expectations for its $999 iPhone X.

To overcome this, Apple is considering reshaping its strategy by using third party dealers to lure customers with offers, discounts and improved apps, and Apple will enter into separate agreements with these dealers to incentivize them appropriately. Apple may supplement these with its own branded stores in the metropolitan cities of Mumbai, Delhi and Bengaluru. Some of the price fluctuations that occur here may also be dealt with by announcing a steady price point and only working around the offers and discounts.

It is not as if Apple is waking up to these issues only now. It had already initiated a few steps like shifting the manufacturing of some of the low-end models locally. That is being expanded gradually. However, the company has a few issues to sort out with the government. It wanted a differential duty structure for some of its components which the government has steadfastly refused. With its already higher priced phones and the Rupee-Dollar rates plunging lower and lower and the additional Customs Duty imposed by the government on imported smartphones, it is going to get tougher to say the least.

An area where Apple gets beaten by the Korean and Chinese smartphones is in the localization of apps, adaptability to the language and so on. Even a simple tool like the Apple Maps is way behind rivals like Google in terms of ease of use. Siri support for at least a few Indian languages is a must if the company wants to reach out to the buyers in India.

With three top executives having quit the Indian operations and a whole new team at the helm with new ideas can probably lift brand-Apple from the miserable bottom of the market share table.

Elsewhere, there is also the issue of permitting the DND app on its iPhones which the government of India wants it to carry in the app store but Apple is arguing that its iOS 12 has an unbuilt mechanism to block unwanted calls and it does not want to compromise on its phones’ user security.