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Magic Happens for Apple in India Ahead of Promising 2020

Apple knows this well and to bring more aspirational Indians to its ecosystem in 2020, it is ready with an aggressive market approach, while continuing with price drops and attractive offers

By NISHANT ARORA

In January this year, Apple CEO Tim Cook mentioned several reasons why iPhone sales were not picking up in the emerging markets including in India — customers holding on to their older iPhones a bit longer, weak macro-economic conditions, foreign exchange, and battery exchange programs.

As the year draws to an end, there has been a complete turnaround in Apple’s market share and presence in India, and all the above-mentioned reasons for poor growth have somehow magically disappeared.

The Cupertino-based tech giant is fast selling almost all products — iPhones, Apple Watch, Mac desktops, and AirPods Pro — apart from a growing Apple TV+ community in India.

The growth is coming despite the fact that the economic downturn has crippled several industries and people haven’t suddenly discovered more money to spend on premium smartphones and other devices.

The reason lies in a better understanding of a market that requires unique customer strategies and mind games, not seen in other, more evolved smartphone territories.

According to industry experts, fuelled by attractive price drops on previous-generation iPhone models especially iPhone XR, 7 and 8, Apple has been able to pen a new India growth story.

“Together, these (iPhone XR, 7 and 8) accounted for more than 70 percent of shipments for Apple in the third quarter (July-September period) of 2019. A larger impact was made by online sales festivals with attractive cash backs on cards, buybacks and affordability schemes like No-cost EMI. Online channel accounted for almost 40 percent of Apple shipments in 3Q19,” Upasana Joshi, Associate Research Manager, Client Devices, IDC India, told IANS.

Apple, Tim Cook, Campus, China
Apple CEO Tim Cook discusses the new Apple iPhones and other products at the Steve Jobs Theater during an event to announce new products in Cupertino, California. VOA

Owing to the price cut, the average selling point (ASP) for Apple stood at $729 (nearly Rs 52,000) in the third quarter, lower than the previous quarters.

The new lineup of iPhone 11/Pro series has further added to the growth momentum, especially the iPhone 11 with ASP less than $850 (approx Rs 61,000) as compared to the higher variant of Pro and Max.

“The opening quarter shipments for the new iPhone 11/Pro series has had a good reception, together accounting for 23 percent of Apple shipments in 3Q19,” Joshi informed.

Apple topped the premium smartphone segment by garnering a massive 51.3 percent share in the Rs 35,000 and above price segment in the third quarter.

Apple regained top position in the premium segment in India in the second quarter with an overall share of 41.2 percent.

Not just iPhones, Apple Watch is witnessing a great adoption among its Indian fans.

Apple, Campus, Tim cook
Apple CEO Tim Cook speaks during an event to announce new products, Oct. 30, 2018, in the Brooklyn borough of New York. VOA

According to Joshi, Series 5 watch that is essentially an upgrade to the Series 4 at a similar price point will see larger traction in the coming quarters, as Apple phases out the Series 4.

“The previous generation model continues to drive majority volumes with an attractive price drop on Series 3 GPS (now starting at Rs 20,900) during the festive quarter. We expect this momentum to continue in the coming few quarters,” she told IANS.

Apple has positioned the Watch series on health and awareness that has resulted in its uptake in India.

Joshi said that the well-planned positioning with Series 3 at the entry-level and Series 5 in the premium segment would entice Apple enthusiast to switch to either of the two as per usage and demand.

Another product category — Mac desktops — helped Apple register record growth in the India market in the July-September period. The newly-arrived ‘in-ear’ wireless AirPods Pro with Active Noise Cancellation and immersive sound technology are selling like hotcakes.

Also Read: Tesla Receives 1.46 Lakh Orders for ‘Cybertruck’, Claims Elon Musk

For Cook, India has been a very important market in the long-term and next on his list are retail stores and local manufacturing of high-end smartphones. Things have started moving on this front — iPhone XR is being manufactured at Apple supplier Foxconn’s facility in Sriperumbudur, Chennai and iPhone 7 and 6S being assembled at supplier Wistron’s facility in Bengaluru.

For the coming quarters, Joshi said, Apple should continue to focus more on the $700-$850 (Rs 50,000-Rs 61,000) segment, as that is the sweet spot for iPhones in India with added attractive offers for making the new model lineup a little more affordable, however, continuing to focus on older generation portfolio for volume growth.

Apple knows this well and to bring more aspirational Indians to its ecosystem in 2020, it is ready with an aggressive market approach, while continuing with price drops and attractive offers. (IANS)

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