Why Apple failed in India is a question that always used to come in my mind and recently I found something strange!
Just the other day I was visiting an engineering firm in Singapore and after the visit, their team of engineers, mostly Indians, invited me for lunch so I went with them. But as I was talking to them, I realized among seven of them, none is using an iPhone. So I asked why? And then I realized how unpopular iPhone s are among Indians and how unpopular iPhone is in India.
I was really eager to find out why Apple failed in India?
I don’t want make claims that I found iPhone is not popular in India without backing it up. So here we go.
If we look at the statistics, iPhones are popular around the world. Taking a look at its market share would give us a good gauge. On an average iOS takes 18.91% of the mobile operating system market share. If we look at is market share by region, iOS usage is the highest in North America and Oceania which amounts to 48 percent. Followed by Europe in which OS occupies 24.06 percent of smartphone market share. In both Asia and South America, iPhone occupies around 10% and lastly in Africa, iPhone takes 7% of the market.
Well you might say India is a developing country and iPhones are expensive so obviously more people in the developed nations will purchase an iPhone than people in the developing nations. You are probably right.
But for that, let’s look at BRIC countries (Brazil Russia India and China).
In Brazil iPhone takes 11.57% of the market. In Russia iOS takes 23.51%. In China iOS takes 21.96%. And finally in India iOS occupies only a whopping 2.9%. Even lower than the average of Africa!!
So obviously, there’s something strange. Something deeper going on behind why Apple failed in India. It’s not just about GDP per capita or economic development! So what is it about??
Well first of all, admittedly price does play a big role in India
Especially with so many cheaper alternatives available from the android side. iPhone X in the United States cost $999 but it cost over $1,300 in India after import duty and currency conversion. That’s a 30 percent premium! One of the highest in the world!!
Apple tried to avoid this premium by opening up its own factory in India but it only managed to do so last year and it decided to produce low-end SE version of iPhones.
Washington Post commented on this move and said,
“By marketing inferior products it may also be insulting Indian customers.”
I have my differences with Washington Post on many matters but I agree with them on this fully.
Secondly Apple is facing some very unconventional and aggressive competitors.
Just in the last three years, the Chinese has taken over India by landslide with a localized strategy. Traditionally Samsung has a strong lead in the Indian smartphone market. But this situation is changing very rapidly.
Xiaomi has just taken over Samsung to be the lead smartphone seller in India in 2017. Oppo and Vivo India’s strategy of opening stores everywhere is also paying off. They’re pushing their smartphones very aggressively by providing high profit margins to sellers. And as a result sellers favors selling Oppo and Vivo phones because they make more per Oppo and Vivo sold.
This new business model is disruptive to the status quo of the industry and is proving to be very effective in populous countries like China and India because rural customers like to hold and feel the phone before buying it. Yet flagship smartphone stores do not reach the vast majority of villages in China or India.
Facing this unconventional competition from the Chinese, Samsung is quick to adapt and started opening stores in rural areas. Apple is not. Therefore despite Tim Cook being very vocal about his plan to conquer the Indian market, Apple failed in India.
Lastly, if it comes to the key factor that prevents Apple from succeeding in India, I think it’s Apple itself.
Apple has been successful in sticking with its Golden brand, but to the vast majority of new customers in India (over 50 million Indians will own a smartphone for the first time in 2018) Apple’s brand means nothing to them! They like to look at specs, features and iPhone is hardly superior in that regard. And perhaps most importantly Apple strengths in other markets has made Apple unable to change and adapt in India.
India is a diverse country culturally, religiously and linguistically. And therefore it requires agility from Apple side to accommodate these differences.
For example, app stores require credit cards to pay for apps but according to the same Washington Post article, only 1% of the Indian population have credit cards. Additionally, Apple music is also considered inferior compared to its local competitors such as Saavn and Gaana. What about Siri? It hardly recognizes the Indian accent!
Apple’s other products like the Mac is just outrageously expensive for the market. My point is, what Apple does well in other countries to lock in its customers, doesn’t work in India.
On the contrary, I’m seeing the opposite happening right now. With 2.9 percent market share, Apple will find more and more of its potential customers getting familiar with the Android system and with Samsung, Xiaomi and Oppo. As a result, Apple will find it even harder to penetrate the Indian market in the future.
When these customers choose to upgrade their phones, they will ost probably chose the same Android brand because of the familiarity. A few years down the road the reverse will happen to Apple in India. When people get comfortable with Google’s ecosystem with Google Assistant, Google Documents, Play Store and perhaps Google home, Apple will find it even harder to be popular in India.
Apple has a great brand. A brand that is associated with perfection, user friendliness and creativity. But Apple Failed In India and has hit the wall.
If it’s not willing to bend certain rules, not willing to adjust to the diverse culture and language in India, Apple is in trouble.
Obviously this is a very interesting case for Apple. Apple is almost popular everywhere except India. As you guys know, Apple stock price has just passed a trillion in US dollars. Being the first company that has passed a trillion dollars mark. That is why Apple’s failure in India will only have a very long lasting effect on Apple in the future as India becomes the fastest-growing smartphone market in the world. It is I think already the fastest growing smart phone market in the world right now.
So let me know your views on the three reasons why Apple Failed In India.
Please also use the comment box to let me know if you want to hear more such case studies in the future.