A combined effect of higher prices and better Android phone alternatives in the Indian market meant that Apple is losing out on one of the largest markets for smartphones in the world. The steep climb in the exchange rate to the US dollar has been an additional spoilsport as far as Apple is concerned. The net result of all these is that the company has dropped its sales in the country by a whopping 25% over the previous year, as per a Reuters report.
Most consumer product companies achieve maximum sales during the third quarter, leading up to the festive Diwali season. But Apple ended up selling only 700,000 to 800,000 phones against over 1 million in the same quarter last year. Even in terms of the overall figures for the year, Apple’s sales figure for smartphones in India will not be more than 2 million, whereas it sold over 3 million the previous year.
The underlying reasons for this could be, as stated above, a combination of many factors. Apple does price its products higher than competition. Then, the Indian government has increased the import duties on smartphones in order to encourage manufacturing in India. Most Chinese and other manufacturers have set up their assembly lines and are producing here. Apple also has an arrangement but only a couple of models get assembled here. The rest are imported. And the increased Rupee value that the customers have to pay due to high value of the dollar vis-à-vis the Rupee has added to Apple’s woes in the market. Lastly, the general perception is that there has not been any major improvement or path-breaking changes in the new smartphones released by Apple over the previous iterations. All these have led to a reduced interest in Apple’s phones in the Indian market.
There has been the steady increase in the release of high-end phones from China and Korea which match or even surpass Apple’s phones in terms of features. This is confirmed by the revelation that of the quantity sold, a large portion is of the earlier years’ models with smaller screen sizes.
Apple may have to completely rework its strategy for the Indian market since there is no dearth of buyers among the 1.3 billion strong population for luxury goods and Apple should be able to regain its hold in the market over a period.