Apple's India chief reportedly departs amid sluggish sales

Posted:
in General Discussion edited December 2017
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 The company has attempted to bring down out-the-door costs by maintaining sales of outdated models, while introducing lower-spec versions of existing hardware.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.
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Comments

  • Reply 1 of 45
    In overprotective countries such as India, Brazil and Turkey it is difficult for Apple to push for competitive prices because of over-regulation, high taxes and market restraint measures that in practice only make the consumer's life harder and more expensive.
    bshankcornchippatchythepirateentropyswatto_cobra
  • Reply 2 of 45
    fallenjtfallenjt Posts: 3,976member
    Told you guys before. India is not like China. The Chinese can sell a kidney for an iPhone while the Indian wouldn’t even give up a Masala for it...bottom line: Indians are cheap, man...lol no offense!
    bshankcornchippatchythepirate
  • Reply 3 of 45
    There's no way Apple can ever sell many iPhones in India. Apple doesn't sell $100 smartphones. A used iPhone 4s could be too expensive for most Indian consumers. That's just the way it is. I'm sure Apple must realize this and is merely going through the motions so as not to insult India. India should have allowed Apple to sell refurbished iPhones to consumers but pride seems to be more important than common sense. Both Apple and Indian consumers lose out. Android smartphones have about 98% market share in India. Just unbelievable. That fact alone practically obliterates any chance of Apple gaining global smartphone market share percentage. The Android smartphone manufacturers are laughing hard at Apple in India.
    patchythepiratewatto_cobra
  • Reply 4 of 45
    tzeshantzeshan Posts: 1,975member
    Apple should give up any effort by itself.  Let Indian consumers to decide how many iPhones they are willing to buy. Although India is a democratic country, it is not a free market economy. 
    entropys
  • Reply 5 of 45
     There is also the factor of the many Indians that work on IT, travel around the world and obviously do not want to pay local higher prices.
    3% looks to me more as sales share, not so much as market share.
  • Reply 6 of 45
    sreesree Posts: 104member
    There's no way Apple can ever sell many iPhones in India. Apple doesn't sell $100 smartphones. A used iPhone 4s could be too expensive for most Indian consumers. That's just the way it is. I'm sure Apple must realize this and is merely going through the motions so as not to insult India. India should have allowed Apple to sell refurbished iPhones to consumers but pride seems to be more important than common sense. Both Apple and Indian consumers lose out. Android smartphones have about 98% market share in India. Just unbelievable. That fact alone practically obliterates any chance of Apple gaining global smartphone market share percentage. The Android smartphone manufacturers are laughing hard at Apple in India.
    India does not discriminate for or against apple. It does not allow any used or refurbished goods to be sold in the country (from any company), since such a regulation can and will be misused by the 'global' corporations to dump electronic junk in the country. 

    The restriction exists for the sake of the environment, and we don't see any reason why it should be changed.
    muthuk_vanalingam[Deleted User]macplusplusmacguiChandigarh_Boy_1STnTENDERBITSgatorguysingularitywlym
  • Reply 7 of 45
    sreesree Posts: 104member
    In overprotective countries such as India, Brazil and Turkey it is difficult for Apple to push for competitive prices because of over-regulation, high taxes and market restraint measures that in practice only make the consumer's life harder and more expensive.
    The taxes and regulations are the same for all the companies. While all the other smartphones are cheaper in india than the US, only the iPhone is costlier. We are all flummoxed how apple is achieving that.

    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?
    [Deleted User]macplusplusmacguiChandigarh_Boy_1STnTENDERBITSgatorguywlym
  • Reply 8 of 45
    sreesree Posts: 104member
    fallenjt said:
    Told you guys before. India is not like China. The Chinese can sell a kidney for an iPhone while the Indian wouldn’t even give up a Masala for it...bottom line: Indians are cheap, man...lol no offense!
    Yes the guy who will sell a kidney for a phone is the ideal to strive for.... 
    macguiChandigarh_Boy_macxpresssingularityluv2ripwlym
  • Reply 9 of 45
    There's no way Apple can ever sell many iPhones in India. Apple doesn't sell $100 smartphones. A used iPhone 4s could be too expensive for most Indian consumers. That's just the way it is.

    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.

    edited December 2017 macplusplusrandominternetpersonpatchythepiratewatto_cobra
  • Reply 10 of 45
    Apple's problem may be a channel problem, not a pricing problem. Channel is everything for a foreign brand in such countries. If Apple cannot penetrate that must be because of channel. Must compare with how HP, Dell, Lenovo does. Taxes, regulations, protections and alike are all pretexts, not real reasons. Those taxes, regulations and protections serve also the wealthy classes of those countries who maintain significant purchase power. If you cannot appeal even to those classes something is wrong with your foreign operations.
    edited December 2017
  • Reply 11 of 45
    sree said:
    India does not discriminate for or against apple. It does not allow any used or refurbished goods to be sold in the country (from any company), since such a regulation can and will be misused by the 'global' corporations to dump electronic junk in the country. 

    The restriction exists for the sake of the environment, and we don't see any reason why it should be changed.
    Do you believe this yourself? Is it better for the environment to give a piece of electronics a second life or to discard it and manufacture a new one? If there is consumer-demand for refurbished devices at considerable prices they're definitely *not* electronic junk.
    randominternetpersonpatchythepiratepscooter63wlymwatto_cobra
  • Reply 12 of 45
    asdasdasdasd Posts: 5,293member
    sree said:
    There's no way Apple can ever sell many iPhones in India. Apple doesn't sell $100 smartphones. A used iPhone 4s could be too expensive for most Indian consumers. That's just the way it is. I'm sure Apple must realize this and is merely going through the motions so as not to insult India. India should have allowed Apple to sell refurbished iPhones to consumers but pride seems to be more important than common sense. Both Apple and Indian consumers lose out. Android smartphones have about 98% market share in India. Just unbelievable. That fact alone practically obliterates any chance of Apple gaining global smartphone market share percentage. The Android smartphone manufacturers are laughing hard at Apple in India.
    India does not discriminate for or against apple. It does not allow any used or refurbished goods to be sold in the country (from any company), since such a regulation can and will be misused by the 'global' corporations to dump electronic junk in the country. 

    The restriction exists for the sake of the environment, and we don't see any reason why it should be changed.
    Refurbished phones are sold all over the world. In fact refurbishing a phone utilises components that otherwise might go into landfill. 
    watto_cobra
  • Reply 13 of 45
    In overprotective countries such as India, Brazil and Turkey it is difficult for Apple to push for competitive prices because of over-regulation, high taxes and market restraint measures that in practice only make the consumer's life harder and more expensive.
    Lowering taxes, deregulating, extending the free market, easing consumers' life are those countries' internal political issues. A merchant cannot push these as pretext. As a merchant your job is to sell and sell under every circumstance.
  • Reply 14 of 45
    macguimacgui Posts: 1,262member
    asdasd said
    Refurbished phones are sold all over the world. In fact refurbishing a phone utilises components that otherwise might go into landfill. 
    I have purchased several Apple refurbs and aside from the lack of retail packaging, every one has been indistinguishable from a brand new Apple product, and come with the same warranty as the new product.

    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.
    asdasdwatto_cobra
  • Reply 15 of 45
    asdasd said:
    sree said:
    There's no way Apple can ever sell many iPhones in India. Apple doesn't sell $100 smartphones. A used iPhone 4s could be too expensive for most Indian consumers. That's just the way it is. I'm sure Apple must realize this and is merely going through the motions so as not to insult India. India should have allowed Apple to sell refurbished iPhones to consumers but pride seems to be more important than common sense. Both Apple and Indian consumers lose out. Android smartphones have about 98% market share in India. Just unbelievable. That fact alone practically obliterates any chance of Apple gaining global smartphone market share percentage. The Android smartphone manufacturers are laughing hard at Apple in India.
    India does not discriminate for or against apple. It does not allow any used or refurbished goods to be sold in the country (from any company), since such a regulation can and will be misused by the 'global' corporations to dump electronic junk in the country. 

    The restriction exists for the sake of the environment, and we don't see any reason why it should be changed.
    Refurbished phones are sold all over the world. In fact refurbishing a phone utilises components that otherwise might go into landfill. 
    Are they really sold all over the world? I'm in Canada and can't seem to find a way to buy a refurb iPhone. Are they available in the USA?
  • Reply 16 of 45
    Chandigarh_Boy_Chandigarh_Boy_ Posts: 2unconfirmed, member
    I find it funny how people who know nothing about India are commenting like rabid dogs and spewing venom.

    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.
    gatorguysingularityluv2ripanantksundaram
  • Reply 17 of 45
    There's no way Apple can ever sell many iPhones in India. Apple doesn't sell $100 smartphones. A used iPhone 4s could be too expensive for most Indian consumers. That's just the way it is. I'm sure Apple must realize this and is merely going through the motions so as not to insult India. India should have allowed Apple to sell refurbished iPhones to consumers but pride seems to be more important than common sense. Both Apple and Indian consumers lose out. Android smartphones have about 98% market share in India. Just unbelievable. That fact alone practically obliterates any chance of Apple gaining global smartphone market share percentage. The Android smartphone manufacturers are laughing hard at Apple in India.
    Laughing at Apple in India, maybe. But not making any money. So the joke is on them
    entropyswatto_cobra
  • Reply 18 of 45
    I find it funny how people who know nothing about India are commenting like rabid dogs and spewing venom.

    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.
    Spell Check before posting please.
    watto_cobra
  • Reply 19 of 45
    sree said:
    There's no way Apple can ever sell many iPhones in India. Apple doesn't sell $100 smartphones. A used iPhone 4s could be too expensive for most Indian consumers. That's just the way it is. I'm sure Apple must realize this and is merely going through the motions so as not to insult India. India should have allowed Apple to sell refurbished iPhones to consumers but pride seems to be more important than common sense. Both Apple and Indian consumers lose out. Android smartphones have about 98% market share in India. Just unbelievable. That fact alone practically obliterates any chance of Apple gaining global smartphone market share percentage. The Android smartphone manufacturers are laughing hard at Apple in India.
    India does not discriminate for or against apple. It does not allow any used or refurbished goods to be sold in the country (from any company), since such a regulation can and will be misused by the 'global' corporations to dump electronic junk in the country. 

    The restriction exists for the sake of the environment, and we don't see any reason why it should be changed.
    Refurbishing phones is the environmentally friendly practice. Opposite of India’s policy. “Reduce. Re-use. Recycle.” Ever heard of it?
    edited December 2017 entropyswatto_cobra
  • Reply 20 of 45
    asdasdasdasd Posts: 5,293member

    bshank said:
    There's no way Apple can ever sell many iPhones in India. Apple doesn't sell $100 smartphones. A used iPhone 4s could be too expensive for most Indian consumers. That's just the way it is. I'm sure Apple must realize this and is merely going through the motions so as not to insult India. India should have allowed Apple to sell refurbished iPhones to consumers but pride seems to be more important than common sense. Both Apple and Indian consumers lose out. Android smartphones have about 98% market share in India. Just unbelievable. That fact alone practically obliterates any chance of Apple gaining global smartphone market share percentage. The Android smartphone manufacturers are laughing hard at Apple in India.
    Laughing at Apple in India, maybe. But not making any money. So the joke is on them
    Well there are high level Android phones manufactured and sold in India. 
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