Breaking his silence on Apple’s presence in India, CEO Tim Cook admitted last week that his business was flat in the country in the fourth quarter amid weak currency trends. Cook, however, stressed he is still a big believer in the Indian middle class.
Essentially price-conscious, India, with 450 million users, is the fastest-growing smartphone market, just after China and the US, and has the potential to continue growing in double digits in the next couple of years.
According to industry analysts, Cook is aware of the immense potential in the country and would fully utilise the aspirational value of the brand as saturation sets in, in the rest of the smartphone economies.
That day appears not too far when Apple, with its deep pockets, will unleash its energies as its own stores arrive and the company starts manufacturing new iPhones locally.
Cook’s optimism is underlined by the fact that Apple’s share in the premium segment is dipping as new players like China’s OnePlus appear on the scene in a market where South Korea’s Samsung had reigned supreme.
At third place, Apple had 25 per cent market share in the third quarter (ending September 30) as it launched flagship iPhones XS and XS Max in India.
According to Counterpoint Research, the new devices are unlikely to offset the high import duty owing to absence of local manufacturing as this made new iPhones expensive as compared to their pricing in other key countries.
“2018 is all set to be the first year for Apple in India when they will go through their first ever annual decline in India in terms of volume. We expect iPhone sales to be between 2-2.5 million as compared to more than three million last year,” Tarun Pathak, Associate Director at Counterpoint, told IANS.
There are multiple factors for this.
“First, the year started for Apple with multiple duty hikes on imported handsets. This led to an increase in iPhones prices as Apple is yet to assemble locally, barring a couple of models where volume contribution is low,” Pathak explained.
Additionally, said Pathak, Apple has streamlined its channel strategy in a bid to offer more stable pricing which had some short-term implications but can turn out positive for long term.
Cook expects that at some point, the Indian government will allow Apple to bring its stores into the country.