For the first time in over two years, India did not get a prominent mention in Apple’s quarterly analyst call on Tuesday. Analysts believe that was because iPhone-maker did not really have anything positive to talk about the market here.
Issues have been brewing at Apple India not just now but for the last couple of quarters. Sales have been on a constant decline even as the company went ballistic with discounts and offers for most of its smartphones. In the first six months this year, the company’s iPhone sales have dropped over 30 per cent compared with the previous year.
However, Apple’s global revenues grew 16 per cent in the June quarter at $61.1 billion. iPhone revenues grew 14 per cent year-on-year while there was a 38 per cent decline sequentially.
Apple has been losing out on two fronts. While a push for a mid-market device iPhone SE impacted its premium tag in the country, it was unable to get enough buyers for its flagship as the company has been unable to command a 40-50 per cent premium over the competition. The price became a bigger issue with the increase in import duty, which has led every single smartphone maker to start manufacturing in India, except for Apple.
Losing the top spot
Apple does manufacture iPhone SE in India, which practically has no takers now. “Aggressive discounts by Apple were a clear sign that the company is unable to meet its internal targets,” said Jayanth Kolla, Founder at Convergence Catalyst. “While there has been a decent demand for iPhone X, it has not translated into sales in India because of the high price tag,” Kolla said.
That has led to brands like OnePlus taking over the top spot from Apple. Analysts believe that OnePlus has showcased deeper engagement with consumers, highlighting the value that it brings to the table whereas Apple has had an inconsistent marketing drive in the country, leaving the consumers confused as to why they should buy a phone for ₹1 lakh when they can get better specs from other popular brands at less than half the price.
“They have to tell users why they are premium other than being an Apple phone. Just calling it well engineered is not enough for most consumers in India,” Faisal Kawooza, Lead, Telecom practice at CyberMedia Research, said.
Apple has also reshuffled its top management in India following the drop in sales in the last two quarters.
But that’s not going to be enough for the smartphone maker, say experts.
Customised needs
“In India, it will be a while before seeing Apple at the top. The new team has to come in and set the wheel in motion again. There needs to be innovative India-specific sales plan and offer,” Kolla said.
Apple also needs phones that are suited for the Indian market. iPhone sales are waning as owners of iPhone 6 and above are not willing to upgrade to iPhone X because of the high price and they don’t see any value in upgrading to iPhone 8.