Why The Apple iPhone Has Stumbled In India
The original iPhone generated a lot of interest in India, selling well on the grey market, so it went to reason that when the 3G version launched officially in the world’s fastest growing wireless market, that it too would sell well. But apparently, that’s not what happened, with sales of the iPhone 3G falling far short of Apple’s own internal goals of moving 100,000 units by December 2009. Livemint.com reports that analysts tracking the Indian handset market estimate that half that number has been imported, with just a fraction—11,000 phones—sold so far. Given that every handset marker from the market leader Nokia (NYSE: NOK) to up and coming HTC have been anxious to capture the rapidly expanding Indian market, it seems odd that Apple (NSDQ: AAPL) hasn’t taken sales in the country more seriously.
So what hurt the iPhone 3G’s uptake in India? For one, pricing was always going to be part of it. At $800, the gadget was without a doubt, expensive, especially considering a typical IT worker’s annual salary ranges from $12,000-$24,000. But cost isn’t the entire reason. As Livemint points out, Nokia’s N96, Samsung’s Omnia and BlackBerry Bold all cost even more than the iPhone. “Pricing communication” was a bigger reason. Indian consumers were well aware that the iPhone was selling in the US for $199, but Apple made no attempt to explain the sizable cost difference—that subsidizing handsets isn’t common practice in the Indian market as it is in the US. Even worse, the phone was locked to the carrier, despite consumers being charged full price. Apple also left too much to its operator partners—Bharti Airtel and Vodafone—which didn’t have the experience of aggressively selling handsets. They only sold the phones in their own stores, instead of branching out to the numerous retail phone outlets in India that sell 50 percent of all handsets. Marketing was another downfall. Again, it was left to Vodafone (NYSE: VOD) and Airtel, which didn’t push the phone that hard, and certainly didn’t position the iPhone as a “lifestyle” product, or make it seem “aspirational.” (Apparently, selling the iPhone as a lifestyle product could have compensated for the fact that India doesn’t yet have 3G networks, rendering the phone’s 3G capabilities useless).
Nokia, meanwhile, will be happy to learn that Apple’s strategy “was not to sell a million phones in India” and that “it only wanted to establish a presence in the country,” as Airtel’s CMO Sanjay Gupta told Livemint. Nokia dominates the Indian smartphone market, with research firm Gartner estimating they have an up to 70 percent share of it.
In a separate story, Reuters reports that India added a record 7.7 million mobile users in October to its GSM-based networks, according to the Cellular Operators’ Association of India (COAI). Total GSM mobile users at the end of October numbered 241.4 million, up 3.3 percent from 233.7 million in September. The number does not include India’s CDMA mobile users. At the end of September, number two network Reliance Communications, which is CDMA-based, had 56.1 million users.
Photo Credit: Kartihksn
Posted In: Mobile, Technologies / Formats, 3G
Newsletter
Comments (8)
Nov 14, 2008 1:59 AM
Why is the phone locked to carrier even after paying full cost? I guess there might be more sales if they sold it in open market and not going with these operators who are charging a bomb for data rates for iPhone.
Nov 17, 2008 3:21 AM
You dont need to be a rocket scientist to crack this.
1. Indian Market is price sensitive. One can get unlocked iPhones are a lower rate.
2. Indian customers who have the purse to go for highly priced phones and had already invested in their BlackBerrys and others, didnt get any incentives from the Operators or Apple to switch.
Dec 15, 2008 7:49 AM
The thing about iPhone is that its not really a very high tech phone, comparing to Blackberry, must people would choose BlackBerry. And the thing iPhone sells so well around the world, is becasue it targets teens who only care about the looks of iPhone whereas Indian teens dont have such money to waste.
Feb 3, 2009 3:49 PM
india is a very price sensitive market
nokia is going to celebrate the failure of the iphone sales in india and going to grab a share of the touchscreen phone market
Mar 23, 2009 6:17 AM
When marketing fails…seems to me like some amateurs were in charge here
“it only wanted to establish a presence in the country”
Yeah sure…
Apr 29, 2009 12:38 AM
Mr SAM NICHOLS
U have any freakin idea ...........watcha talkin about… Have you ever used a iphone or a black berry….... OMG how cud u be so dumb… If u think teens in america buy iphone then u must be the dumbest person in the world…. IN usa iphone comes with a price tag of $200 and a monthly of $90 and with a 2 year contract that you have to sign….. so do u think a teen can afford that….. and wat the heck do u know about the technology used in iphone..do u know the about the operating system in the two phones…. do u know that iphhone had a opensourse sdk that lets app developers to develop their own application for iphone….. do u know about the latest blackberry phone…....lol they r trying to implant iphone features in it…..which city r u from….....hmm the knowledge that u flaunt forces me to jump to a conclusion ........ probably BIHAR lol and made it clear that your knowledge about phones is an absolute ZERO….......go get a life dude
May 3, 2009 5:54 AM
Hi Kris, I was just wondering if you have all the knowledge in the world about iphones and Blackberry devices. I live in the UK and have family back in BIHAR… and believe me, my family back there is far more educated and civilised compared to your rantings against Sam Nichols!!!
“The thing about iPhone is that its not really a very high tech phone, comparing to Blackberry, must people would choose BlackBerry. And the thing iPhone sells so well around the world, is becasue it targets teens who only care about the looks of iPhone whereas Indian teens dont have such money to waste.”
I have a Blackberry Bold and an iphone… and I do agree that people here in the UK and US definitely do have the money to waste, what with little guys and girls who are as young as 15 getting their parents to sign lengthy contracts for them to get them the latest phones… oh, and by the way, I work for one of the biggest phone retailers here in the UK, so if you think you are a Mr, know-it-all, keep it to urself… don’t try to be derogatory and too keen to be ‘jumping to conclusions’... this is a public forum and everyone can say what they like, but atleast maintain some decorum and behave like educated people.
May 5, 2009 1:24 AM
a good one keep it up…
thank you..