Business

The Apple is falling but this time not due to Gravity

Apple is gearing up for a revamp of its iPhone line-up, but it will need to do a lot more to catch its rivals in the world’s second largest smartphone market. The company’s signature device has failed in recent days to cope with the growing competition and has lost a significant foothold in India.

India is one of the world’s most expensive places to buy Apple devices and with increased tariffs; the price of an iPhone X went up to $1,700 earlier this year. That puts it out of reach of most Indians, who earn less than $2,000 a year on an average. According to IDC, people do not even spend so much on their TVs and other consumer durables in India generally.

In the first half of 2018, analysts attributed downfall of apple’s might to the company’s change in strategy to prioritise profitability rather than growth by cutting discounts and distribution. The smartphone maker recorded a 55% drop in the June quarter from last year and a 30% drop sequentially. In the March quarter, shipments fell 22% on year and 46% from the preceding three-month period, as per the estimates of Singapore-based Canalys, International Data Corporation (IDC) India, Counterpoint Research and Cybermedia Research.

Competition in the premium market–where Apple has been traditionally strong–has intensified with new entrants such as OnePlus marking a strong presence, besides a resurgent Samsung, experts said. Samsung and Xiaomi, meanwhile, make nearly all their Indian smartphones locally, have doubled, and tripled respectively their manufacturing capacity in the country in recent months. They have carved out a dominant position in the market. Apple is also losing out among wealthier Indians, its prime target market

Experts have claimed that Apple needs to recognise the heterogeneous nature of the fast-growing Indian market and develop a strategy that includes expanding its retail presence, building further on its brand and manufacturing more models locally to save on import duties. “The brand wants to sell one product all around the world, but it will have to change that mind-set to be successful in a country like India, where customers aspire to own an iPhone but at affordable prices,” CMR’s Kawoosa said. “There have to be more models at lower price points than just the iPhone X.” Counterpoint’s Srivastava said Apple needs to manufacture more models in India than just the iPhone 6 and the SE as this will reduce prices by about 20%, the import duty on every phone shipped into the country. This is why the iPhone is the most expensive in India, compared with other markets such as the US or Singapore. Amidst the tough competition from the Chinese brands, Apple needs to revamp their strategy to cater to their reputation in India. However, it needs to understand the fact that India is a price sensitive market. Amongst the masses, there are people who are willing to pay the price for a premium quality but that premium quality is also offered by brands such as OnePlus at half of Apple’s prices. This is the reason that a huge part of the high-income Indian consumers are gradually inclining towards OnePlus instead of Apple.

Rudra Prakash Sarkar

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