Apple facing uphill battle in India from Samsung mindshare, factory expansion
Other than just battling the Indian government for concessions and dealing with the shaky financial situation of the populace, Apple is also fighting a large and aggressive Samsung presence in the country for the minds of the consumers.
According to a new report from the Wall Street Journal, Apple is making little headway in India for more than just cost reasons. Fighting to even maintain its 3 percent market share, Apple will face new competition from Samsung clutching 27 percent of the marketplace, and expansion in the form of a new $760 million facility in the outskirts of India's capital city.
The report cites recent analytics seeing local Indian vendors market shares plummeting in the last year, at the expense of Oppo, Vivo, and BBK Electronics offerings in the country. Samsung is impacted as well, but still commands nine times the market presence that Apple does.
But, it's not clear how much profit the other manufacturers make in the country. Analysts estimate that more than 75 percent of the phones in the country sell for less than $250, with 95 percent selling for less than $500. The overall average of all smartphones sold is estimated to be right around $150.
According to the new report, Apple is considering flagship stores in New Delhi, Bangalore, and Mumbia -- all three locations where most of India consumers wealth is centered. This is in addition to the Apple Authorized Reseller expansion that Apple was said to be examining in March.
Trade partners are reportedly already setting up the Apple Authorized Reseller locations, with the first batch including places in New Delhi and areas of the National Capital Region, such as Vasan Vihar and Malviya Nagar. Other cities including Mumbai, Bengaluru, Pune, and Chandigarh will also see reseller openings in the future.
In early March, the iPhone 6 went on sale exclusively through Amazon for $435, with the revived smartphone offered with an unusual 32 gigabytes of storage, similar to sales in a few other markets. The iPhone SE has been seen for sale in India new for as little as $320.
Apple has also floated the idea of selling refurbished iPhones in India, providing more modern generations of the mobile device to the population at a low cost, to try and combat the high sales of cheap Android smartphones by Samsung, and others. So far, the government has pushed back on this idea, fearing that this could flood the market with cheap and used goods, and undermining its "Make in India" program to boost local manufacturing efforts.
Apple's push for used phone sales in India was proposed as one of a number of conditions for the company to start manufacturing new iPhones in the country, along with tax breaks and other requests.
Assembly of the iPhone SE at the Karnataka Wistron facility began in mid-May, with the first units said to hit customers in a few weeks after the start of construction. Officials in the Indian government hope the new price for the iPhone SE will drop down by as much as $100 compared to the current local price, though Apple is likely to try and avoid too much of a reduction in order to preserve its margins.
According to a new report from the Wall Street Journal, Apple is making little headway in India for more than just cost reasons. Fighting to even maintain its 3 percent market share, Apple will face new competition from Samsung clutching 27 percent of the marketplace, and expansion in the form of a new $760 million facility in the outskirts of India's capital city.
The report cites recent analytics seeing local Indian vendors market shares plummeting in the last year, at the expense of Oppo, Vivo, and BBK Electronics offerings in the country. Samsung is impacted as well, but still commands nine times the market presence that Apple does.
But, it's not clear how much profit the other manufacturers make in the country. Analysts estimate that more than 75 percent of the phones in the country sell for less than $250, with 95 percent selling for less than $500. The overall average of all smartphones sold is estimated to be right around $150.
According to the new report, Apple is considering flagship stores in New Delhi, Bangalore, and Mumbia -- all three locations where most of India consumers wealth is centered. This is in addition to the Apple Authorized Reseller expansion that Apple was said to be examining in March.
Trade partners are reportedly already setting up the Apple Authorized Reseller locations, with the first batch including places in New Delhi and areas of the National Capital Region, such as Vasan Vihar and Malviya Nagar. Other cities including Mumbai, Bengaluru, Pune, and Chandigarh will also see reseller openings in the future.
In early March, the iPhone 6 went on sale exclusively through Amazon for $435, with the revived smartphone offered with an unusual 32 gigabytes of storage, similar to sales in a few other markets. The iPhone SE has been seen for sale in India new for as little as $320.
Apple has also floated the idea of selling refurbished iPhones in India, providing more modern generations of the mobile device to the population at a low cost, to try and combat the high sales of cheap Android smartphones by Samsung, and others. So far, the government has pushed back on this idea, fearing that this could flood the market with cheap and used goods, and undermining its "Make in India" program to boost local manufacturing efforts.
Apple's push for used phone sales in India was proposed as one of a number of conditions for the company to start manufacturing new iPhones in the country, along with tax breaks and other requests.
Assembly of the iPhone SE at the Karnataka Wistron facility began in mid-May, with the first units said to hit customers in a few weeks after the start of construction. Officials in the Indian government hope the new price for the iPhone SE will drop down by as much as $100 compared to the current local price, though Apple is likely to try and avoid too much of a reduction in order to preserve its margins.
Comments
Not everyone is going to be able to afford an iPhone...selling old phones with old features isn't going to cut it.
I'm not sure if Apple should go down the road of making country specific phones. Seems like that would make it hard for them down the road as you'll have so many different devices compatibility would start to be an issue.
Edit:
The entire iPhone marketshare in the US is about 37%, so India's 5% is actually more than half of US share.
Samsung: Always depicted by the tech media as aggressive, strong, rising, dominating, moving forward, innovating, favored.
I guess having a CEO on trial for corruption, exploding products, being symbiotic with the South Korean government, single family empire and dictatorship is the way to get positive press these days.
Yes, the Indian government.
Are you implying "sell the refurbished ones as brand new at a discounted price" without letting the Indian government (and customers) know about it? Just want to understand your question correctly before commenting on it.
Another way to put it is that, though it may not be easy to see behind the Apple fandom mania to most Apple fans, (in forums such as this,) but, the technology gap always shrinks, there more things are produced the cheaper they become and available to every one at some point an iPhone having a marginally better technological specification won't be enough to sway people who will be too young to have lived through the glory and wonder of the first iPhone and Steve won the hearts of millions of followers loyal to Apple to this day, in the future a new war will be fought, many dont even realize the threat, but my suspicion is that Amazon not another techie like Samsung will be Apple's biggest challenger.
Bezos is amassing a monolith that will be unrivaled in revenues, market share, diversification and also profits, no matter how wealthy Apple will be then too, Bezos will porobably just out spend them, and not on smart phones or tech gadgets either, but on what you use them for the most. Apple will always have the best overall componentry but the difference won't be the day and night difference it used to be, as nice as it might be to own a Ferrari, for most people a nice highend Merc will do just fine, Apple shines at its most brightest when you've invested in its entire ecosystem, how many can afford that when a ( "simple" to most people ) speaker will cost $350
I believe that the current 3% will grow very fast in the next few years. Will it get as high as its global share (14.5% in 2016)? Probably not. But even half that, say, a 7.5% share in equilibrium is needle-moving.
Give Apple time. The company is not stupid.
Samsung actually is most of those adjectives. It's a sprawling conglomerate. People rate their SSDs, screens, phones very highly. From finished products through to components and manufacturing prowess. Credit where credit is due.
Your perception of Apple in the tech press doesn't really reflect reality. For the best part of a decade it has been a press darling.
However, when the Mac tech press starts banging Apple, then perhaps something is afoot.
Tech companies are also already piecing together their own network infrastructure too.
Even Facebook in conjunction with another company has begun laying a 6,000Km fibre connection between the US and Europe. It isn't a proposal or wishful thinking. Deployment is already underway.
Having data centers is necessary but guaranteeing deployment options is also something companies like Google and Facebook are very much aware of. I'm not sure how much importance Apple gives to this aspect in spite of the recent interest in satellite technology.