Apple's India chief reportedly departs amid sluggish sales
On the heels of Apple's decision to increase iPhone prices in India, a move expected to further slow stagnant device sales, the company's head of operations in the region is reportedly stepping down.
Apple CEO Tim Cook visits India in 2016.
Citing sources familiar with the matter, The Economic Times reports Sanjay Kaul has put in papers to leave his post as Apple's India chief after one and a half years on the job. The move comes a few months after the company reported its lowest regional growth rate in more than five years.
"Sanjay has moved on, he will no longer be heading India operations," said one person.
Other sources claim Kaul is likely to start a venture that might not be related to the mobile phone industry, an area where he worked for years. While at Apple, Kaul acted as head of iPhone sales from April 2011 to May 2016, when he was promoted to lead the company's wider efforts in India.
Apple is looking to make inroads into burgeoning regions like India as iPhone reaches peak saturation in mature economies. Given socioeconomic factors, the populous country is not expected to become as important to Apple's bottom line as China anytime soon, but it stands to play a crucial role in continued growth.
Early this year, industry analysts reported a significant uptick in Indian iPhone sales for the 2016 calendar year, which was estimated at a record 2.5 million units. Still, the performance placed Apple in 10th place among other smartphone OEMs. Following market trends, manufacturers selling low- to mid-tier handsets, like Samsung and Vivo, led the pack.
Due in large part to its premium iPhone pricing, Apple holds less than three percent of the smartphone market in India. The company has attempted to bring down out-the-door costs by maintaining sales of outdated models, while introducing lower-spec versions of existing hardware. For example, Apple started sales of a 32GB iPhone 6 variant in March for $435, while the iPhone SE has been made available for as little as $320.
Apple is also looking to sidestep India's steep tax regulations by building iPhone SE units in-country through manufacturing partner Wistron. The first India-assembled SE models rolled off the line in June, but production is considered limited. Wistron is rumored to expand operations in the country to accommodate a next-generation "iPhone SE 2," and the Indian government has signaled support for the endeavor.
Still, Apple faces scrutiny from Indian regulators, who in the past shot down a number of concessions on the company's "wish list" for local manufacturing. Among the allowances Apple floated were a 15-year tax break on imported equipment and components, and a relaxation of India's 30-percent local sourcing mandate.
Beyond manufacturing, Apple is attempting to acquire government approval to sell refurbished iPhones in India, a move that would allow the company to compete with manufacturers selling lower-priced smartphones. Regulators have pushed back against the idea, saying it could flood the market with cheap and used goods, undermining the "Make in India" initiative.
Apple is also said to be eyeing an official retail debut in India that could involve flagship stores in New Delhi, Bangalore and Mumbia. Currently, the company's wares are sold through third-party resellers. Again, current sourcing standards are a hurdle, but government officials are considering exemptions that would allow Apple to sell goods through its own brick-and-mortar sales channel.
Most recently, Apple today raised the price of all iPhone models, save for iPhone SE models built in India, by 3.5 percent to account for a recent increase in import taxes applied to electronics.
Apple CEO Tim Cook visits India in 2016.
Citing sources familiar with the matter, The Economic Times reports Sanjay Kaul has put in papers to leave his post as Apple's India chief after one and a half years on the job. The move comes a few months after the company reported its lowest regional growth rate in more than five years.
"Sanjay has moved on, he will no longer be heading India operations," said one person.
Other sources claim Kaul is likely to start a venture that might not be related to the mobile phone industry, an area where he worked for years. While at Apple, Kaul acted as head of iPhone sales from April 2011 to May 2016, when he was promoted to lead the company's wider efforts in India.
Apple is looking to make inroads into burgeoning regions like India as iPhone reaches peak saturation in mature economies. Given socioeconomic factors, the populous country is not expected to become as important to Apple's bottom line as China anytime soon, but it stands to play a crucial role in continued growth.
Early this year, industry analysts reported a significant uptick in Indian iPhone sales for the 2016 calendar year, which was estimated at a record 2.5 million units. Still, the performance placed Apple in 10th place among other smartphone OEMs. Following market trends, manufacturers selling low- to mid-tier handsets, like Samsung and Vivo, led the pack.
Due in large part to its premium iPhone pricing, Apple holds less than three percent of the smartphone market in India. The company has attempted to bring down out-the-door costs by maintaining sales of outdated models, while introducing lower-spec versions of existing hardware. For example, Apple started sales of a 32GB iPhone 6 variant in March for $435, while the iPhone SE has been made available for as little as $320.
Apple is also looking to sidestep India's steep tax regulations by building iPhone SE units in-country through manufacturing partner Wistron. The first India-assembled SE models rolled off the line in June, but production is considered limited. Wistron is rumored to expand operations in the country to accommodate a next-generation "iPhone SE 2," and the Indian government has signaled support for the endeavor.
Still, Apple faces scrutiny from Indian regulators, who in the past shot down a number of concessions on the company's "wish list" for local manufacturing. Among the allowances Apple floated were a 15-year tax break on imported equipment and components, and a relaxation of India's 30-percent local sourcing mandate.
Beyond manufacturing, Apple is attempting to acquire government approval to sell refurbished iPhones in India, a move that would allow the company to compete with manufacturers selling lower-priced smartphones. Regulators have pushed back against the idea, saying it could flood the market with cheap and used goods, undermining the "Make in India" initiative.
Apple is also said to be eyeing an official retail debut in India that could involve flagship stores in New Delhi, Bangalore and Mumbia. Currently, the company's wares are sold through third-party resellers. Again, current sourcing standards are a hurdle, but government officials are considering exemptions that would allow Apple to sell goods through its own brick-and-mortar sales channel.
Most recently, Apple today raised the price of all iPhone models, save for iPhone SE models built in India, by 3.5 percent to account for a recent increase in import taxes applied to electronics.
Comments
3% looks to me more as sales share, not so much as market share.
The restriction exists for the sake of the environment, and we don't see any reason why it should be changed.
All the android phones that apple is unable to compete against in India are all non-indian companies too (Motorola, Samsumg, Sony, Xaomi, One Plus, Google, Lenovo). How is it that their global prices are the same as their indian prices? while apple devices (especially new releases) easily cost about $200 more in india?
Believe it or not, Apple has great brand cachet with the middle class and upper middle class in India, not to mention the rich and the super rich. Here's an anecdotal encounter I had recently at a restaurant. An older person (easily 60+) sitting at the next table and dressed in the traditional white wraparound (called dhoti) and a white shirt was animatedly explaining something about a mobile phone to his colleague; it took me a while to realize that he had an iPhoneX in hand (with a clear case!). I was flabbergasted because it would have cost him nearly 100,000 INR for the phone and the case. He looked like a businessman, so money was obviously not an issue, but you must have seen the enthusiasm and conviction with which he spoke about the iPhoneX in glowing terms!
The stores of all the premium Apple resellers in my city are always full of people checking out the Apple stuff and buying things. When I got a 2017 MacBook Air recently, I saw someone walk in and, in literally minutes, walk out with the latest model of the Apple Watch.
I hope Apple gets its marketing strategy right to reach out to more customers. One thing that puzzles me is why Apple doesn't roll out its programme to buy the iPhone in monthly installments - this is how a vast majority of consumer white goods are purchased in India and I bet people would buy Apple products in the millions if such a programme were available directly from Apple.
I have purchased a couple of refurbs of products from other manufacturers that have mere 30-90 day warranties and look heavily used though did 'work'.
Totally without any evidence, I can see where less than reputable companies would like to sell 'refurbs' that don't measure up to a new version's reliability, to recoup a quick buck.
It's good that refubing, when done well, saves an item from premature landfill duty. When not, it's just prematurely fill the land (-fill).
Even if India's banning of them were purely protectionism based, the environmental aspect is a perk.
India ALLOWS refurbished phones and electronics to be sold provided the they were originally sold in India as a new product.
It only restricts import of used / refurbished products. Because yes we don't need the shit from west, we don't need your used phones. India is not your junkyard. No one is forcing Apple to sell in India.. they can get the hell out of here of they wish.