Mobiles & Tablets

1 billion iPhones sold: for the next billion, Apple must catch India’s eye

| Updated on: Jul 28, 2016
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The company sold only 4 m units in India last year, but the potential is huge

Nine years after Steve Jobs unveiled it before the world, Apple on Thursday said it had sold a billion of its iconic iPhones. Launched in 2007, the iPhone reinvented the mobile phone market, which, until then, was mostly dominated by bulky, non-intuitive devices.

The iPhone brought an entirely new user interface, based on a large multi-touch display and pioneering new software, redefining what users could do with a hand-held phone.

While the Cupertino-based tech giant achieved the milestone without any notable contribution from India, for its next billion, it must gain traction here, in the world’s fastest-growing mobile phone market.

Apple is estimated to have sold only 4 million iPhones in India last year against 56 million in China. But with the company losing steam in that country and in the US, it cannot afford to ignore India.

“Apple’s base growth has been declining in the US, while it has tapered in China owing to currency valuations. India is an obvious choice for Apple to cross its next 1 billion iPhone sales,” says Sanchit Gogia, CEO, Greyhound Research.

Towards affordability The iPhone’s expensive components, sophisticated technology, and Apple’s high-margin business model meant the handset was beyond the reach of most users. The company had to come up with innovative partnerships, including with telecom operators in different countries, to make its smartphones affordable.

It also launched a pre-owned certified programme, enabling consumers to buy a used device cheap.

Thanks to these schemes, revenues hit $233.7 billion in 2015 and profits soared to $53.4 billion.

However, Apple has not been able to do all this in India due to regulatory hurdles. The bundling scheme, for example, has not taken off because , telecom operators have to pay a percentage of their revenues, including those made from the sale of phones, to the Centre as licence fees.

This has kept Indian operators away from any deals with Apple. Similarly, the Centre is not in favour of allowing Apple to bring refurbished phones to the marketplace.

“If Apple wants to make its presence felt here… it should use its technological prowess to make devices that suit the needs and pockets of tech-hungry users in India. Most other MNCs — from GE to McDonalds — have had to do the same,” said an analyst.

Tech majors such as Google and Facebook are investing big in making themselves more relevant to the Indian market, which has shifted from urban settings to the hinterland, where priorities and needs are very different. To cater to this consumer class is no more an option but a necessity.

With inputs from Varun Agarwal

Published on January 18, 2018

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