Apple loses three Indian executives as company struggles with iPhone sales

Posted:
in iPhone edited July 2018
Three high-level Apple executives in India have reportedly left the company, amid signs the company is liable to see local iPhone sales decline even further in 2018.

Apple iPhone 8


Apple's Indian division has lost its national sales and distribution chief, the head of its commercial channels and mid-market business, and the head of carrier sales, according to Bloomberg sources. One person indicated that the division's sales team is in restructuring.

Apple CEO Tim Cook has often tried to paint India in a positive light, for instance saying he was "very optimistic" about the company's prospects. But the iPhone has had a single-digit marketshare in India for years, a result of the company's unwillingness to build cheaper models to compete with the likes of Samsung and Xiaomi, and the fact that until recently it didn't assemble any phones locally. The iPhone SE and iPhone 6s are manufactured there.

Local production is critical, since tariffs on imported electronics exacerbate the already high prices of iPhones. Most Indians can't afford a state-of-the-art iPhone, which has led to Apple focusing on older models, sometimes ones unavailable in other countries.

"iPhone India sales were weak in the first half of 2018 and, even if they show a big jump in the traditionally strong second half, Apple will still fall short of last year," said Counterpoint research director Neil Shah. The company is said to have sold 3.2 million iPhones in 2017, and less than a million in the first half of this year. Its current marketshare is just 2 percent.

The Bloomberg sources put some of the blame on Michel Coulomb, who took over Indian operations in December and has allegedly been slow to foster business relationships. The people also, however, reiterated long-running complaints that Apple has had trouble understanding the Indian market.

On top of this Apple is in a "Catch-22 situation," Shah added. "It has not put great focus or investments into India because the market is so minuscule."
Avieshek
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Comments

  • Reply 1 of 66
    lkrupplkrupp Posts: 9,447member
    And Apple will probably not be willing to sacrifice margins for market share. India may be a lost cause right now but I’m sure Apple will keep lugging away at it. I hope they don’t decide to mud wrestle in the basement with the cheap crap which would damage the brand in my opinion.
    macxpressmac_dogracerhomie3watto_cobratmayolsjony0
  • Reply 2 of 66
    IreneWIreneW Posts: 240member
    "the market is so miniscule"? India has a huge, growing middle class, most highly educated and tech savvy. They could afford an iPhone if they wanted. But for some reason Apple is not attractive enough for this market.
    Avieshekliketheskycaladaniankayessolsjony0
  • Reply 3 of 66
    MacProMacPro Posts: 19,379member
    IreneW said:
    "the market is so miniscule"? India has a huge, growing middle class, most highly educated and tech savvy. They could afford an iPhone if they wanted. But for some reason Apple is not attractive enough for this market.
    Agreed I smell BS, I am sure Tim knows exactly what he is doing.
    Avieshekracerhomie3watto_cobrakayessjony0
  • Reply 4 of 66
    macxpressmacxpress Posts: 5,171member
    lkrupp said:
    And Apple will probably not be willing to sacrifice margins for market share. India may be a lost cause right now but I’m sure Apple will keep lugging away at it. I hope they don’t decide to mud wrestle in the basement with the cheap crap which would damage the brand in my opinion.
    Yeah I hope Apple doesn't sucker itself into the race to the bottom just to get sales. They haven't yet and stuck to its values. Let's hope this doesn't change. 
    watto_cobrajony0
  • Reply 5 of 66
    LatkoLatko Posts: 398member
    So what ? Too hard to admit for those cash crackers that their several year old tech doesn’t get sold at a 300% premium with so many near-equivalent more affordable alternatives...?
    Blame the local middle-managers !
    edited July 2018 CaffiendAvieshekols[Deleted User]
  • Reply 6 of 66
    Tim Cook knows India’s Market! He is a very smart marketing guy. He knows the value of his products and will not get into a marketing war with Samsung!
    A buyer for an Apple product will pay the price and soon Apple is going to produce in India.
    watto_cobra
  • Reply 7 of 66
    nunzynunzy Posts: 662member
    Apple should just get out of India altogether.  It's not exactly an iPhone-like place. 

    There's plenty of other countries in the world with more wealthy people.  That is where Apple needs to expand.

    Ban India! 
  • Reply 8 of 66
    elijahgelijahg Posts: 2,314member
    macxpress said:
    lkrupp said:
    And Apple will probably not be willing to sacrifice margins for market share. India may be a lost cause right now but I’m sure Apple will keep lugging away at it. I hope they don’t decide to mud wrestle in the basement with the cheap crap which would damage the brand in my opinion.
    Yeah I hope Apple doesn't sucker itself into the race to the bottom just to get sales. They haven't yet and stuck to its values. Let's hope this doesn't change. 
    They definitely aren't racing to the bottom, their pricing for phones seems to be (equivalent rival price x 1.3), and Macs (equivalent rival price x 1.7). I think iPhones are just too expensive for Indians. India's average salary (2016) was only $1670, a 32GB iPhone 6 is $72 upfront + $30/month for 12 months (including data), so $432. That's a massive chunk - 25% - of your $1670 income. The iPhone 8 is $1109 over two years, or $554 per year, 33% of income. Compare that with the UK, where an 8 is considered pricey at $919, in a country where the average salary is $28000. That makes it just 3% of income.
    edited July 2018
  • Reply 9 of 66
    macxpressmacxpress Posts: 5,171member
    elijahg said:
    macxpress said:
    lkrupp said:
    And Apple will probably not be willing to sacrifice margins for market share. India may be a lost cause right now but I’m sure Apple will keep lugging away at it. I hope they don’t decide to mud wrestle in the basement with the cheap crap which would damage the brand in my opinion.
    Yeah I hope Apple doesn't sucker itself into the race to the bottom just to get sales. They haven't yet and stuck to its values. Let's hope this doesn't change. 
    They definitely aren't racing to the bottom, their pricing for phones seems to be (equivalent rival price x 1.3), and Macs (equivalent rival price x 1.7). I think iPhones are just too expensive for Indians. India's average salary (2016) was only $1670, a 32GB iPhone 6 is $72 upfront + $30/month for 12 months (including data), so $432. That's a massive chunk - 25% - of your $1670 income. The iPhone 8 is $1109 over two years, or $554 per year, 33% of income. Compare that with the UK, where an 8 is considered pricey at $919, in a country where the average salary is $28000. That makes it just 3% of income.
    What I we mean is...don't make this a race to the bottom to get sales going forward. So don't get caught in a price war between themselves and their competitors just to get sales. 
    watto_cobra
  • Reply 10 of 66
    iqatedoiqatedo Posts: 1,723member
    nunzy said:
    Apple should just get out of India altogether.  It's not exactly an iPhone-like place. 

    There's plenty of other countries in the world with more wealthy people.  That is where Apple needs to expand.

    Ban India! 
    India is the last place Apple should 'give up on'. The real question for Apple to answer for young, tech savvy Indians is 'why Apple?' They answered this question successfully in Japan, a market many expected Apple could never crack. India will keep Apple grounded and hungry for success. Get Bollywood engaged perhaps.
    racerhomie3watto_cobranunzy
  • Reply 11 of 66
    matrix077matrix077 Posts: 868member
    iqatedo said:
    nunzy said:
    Apple should just get out of India altogether.  It's not exactly an iPhone-like place. 

    There's plenty of other countries in the world with more wealthy people.  That is where Apple needs to expand.

    Ban India! 
    India is the last place Apple should 'give up on'. The real question for Apple to answer for young, tech savvy Indians is 'why Apple?' They answered this question successfully in Japan, a market many expected Apple could never crack. India will keep Apple grounded and hungry for success. Get Bollywood engaged perhaps.
    iPhone in Japan doesn’t get charged insane tax. 

    The only soluftion is to get the best iPhone like iPhone X entirely made in India. Will Apple do that for India market?
    edited July 2018 watto_cobranunzy
  • Reply 12 of 66
    DESI DAAMDESI DAAM Posts: 1unconfirmed, member

    I am an Indian and I can tell you why Apple will never reach a double digit Market Share in India.

    1. Although Indians are riding on the 4G wave and this is Huge Market!!!!, 45 ~ 50% of Indians including myself use dumbphones(Feature Phones) as our Primary Phones, as we find these Phones incedibly cheap, easy to find, easy to get it repaired, have a ridiculously long Battery back up(sometimes upto a week without Charging!!) quite handy and serves the purpose.

    2. The people do buy smartphones but are incredibly witty and spend a lot of time asking people, asking Shop keepers, finding out the specs, making a spec wise comparison of the phones on the Internet and researching a lot before deciding to buy something!(sometimes for months on end!!!)

    3. When I can buy a Monster with 3 GB RAM, massive 5.5 Inch screen, 32GB Internal and 128GB expandable storage, carved out of high grade Aluminium, having the latest processor and running the latest Nougat or Oreo at 1/3rd the Price(Rs 8000 or $116) of an Iphone(Rs 25000 or $365), Why should I buy an iphone which has 1GB Ram, is almost 3 years old, 4.7" screen with 32GB Storage and No external Storage at all?

    4. Even Samsung is finding it very hard to compete in India and is loosing their Market share at an epic pace to a host of domestic and Chinese Companies. I think the only companies understanding the Indian temperment and the Market is Xaomi, Lenovo, Micromax, Huwei etc etc etc.

    Rayz2016tallest skilavon b7IreneWAvieshekliketheskyracerhomie3gatorguylarz2112command_f
  • Reply 13 of 66
    jccjcc Posts: 300member
    Sorry but Apple will never do much business in India. Cook is an idiot. It’s a third world nation. You’d have as much luck getting Africans to buy Apple. India has little infrastructure, it has illiteracy rates of around 70%+, very low standards of living where a lot of people crap in the grass because there’s no plumbing, there’s probably more cows on the streets than cars. Seriously, it’s been like that for centuries and will probably take another century to get anywhere. People who bet on India will go broke before a turnaround. Cook just doesn’t understand. Westerners always think India can and will be like China. And that’s where they’re very wrong.
  • Reply 14 of 66
    anantksundaramanantksundaram Posts: 20,223member
    jcc said:
    ..it has illiteracy rates of around 70%+, ...
    I seriously wonder about your own literacy. 

    Unless, of course, you can provide a cite. Cite (assuming you know what that word means). 
    Aviesheksingularitywatto_cobrakayessmuthuk_vanalingam
  • Reply 15 of 66
    kkapoorkkapoor Posts: 22member
    I have family in India and all of them are iPhone users. However, most middle to upper class Indians have some family in the US or Canada or UK. They are wealthy enough to pay the premium in India for the iPhone but smart enough to just pick it up when they visit their family abroad or ask their family to bring one for them when they visit during the Christmas holidays. A couple of hundred dollars is still a couple of hundred dollars. The Indian mentality about spending money is what Apple really needs to understand. In my view, in order to grow sales in India Apple will have to accept a lower margin on each phone and build loyalty into the population through price. That will pay dividends in the long run.
    edited July 2018 Avieshekcroprwatto_cobraradarthekatkayesslarz2112
  • Reply 16 of 66
    jcc said:
    Sorry but Apple will never do much business in India. Cook is an idiot. It’s a third world nation. You’d have as much luck getting Africans to buy Apple. India has little infrastructure, it has illiteracy rates of around 70%+, very low standards of living where a lot of people crap in the grass because there’s no plumbing, there’s probably more cows on the streets than cars. Seriously, it’s been like that for centuries and will probably take another century to get anywhere. People who bet on India will go broke before a turnaround. Cook just doesn’t understand. Westerners always think India can and will be like China. And that’s where they’re very wrong.
    No. Cook isn't an idiot. And India is a developing nation. That isn't just a euphemism for third world. It literally is developing and is doing so at a staggering rate with a rapidly rising GDP and an educated middle class. You state illiteracy rates are over 70%, which would mean literacy is below 30%. Even in the worst performing Indian states it's roughly double that. Perhaps you meant literacy rates instead of illiteracy? Regardless, when you apply those percentages to India's population of over 1.3 billion, you still get a number - and a potential market - of many hundreds of millions.
    StrangeDaysRayz2016Avieshekracerhomie3watto_cobraradarthekat
  • Reply 17 of 66
    StrangeDaysStrangeDays Posts: 11,558member
    DESI DAAM said:

    I am an Indian and I can tell you why Apple will never reach a double digit Market Share in India.

    [...]

    3. When I can buy a Monster with 3 GB RAM, massive 5.5 Inch screen, 32GB Internal and 128GB expandable storage, carved out of high grade Aluminium, having the latest processor and running the latest Nougat or Oreo at 1/3rd the Price(Rs 8000 or $116) of an Iphone(Rs 25000 or $365), Why should I buy an iphone which has 1GB Ram, is almost 3 years old, 4.7" screen with 32GB Storage and No external Storage at all?

    Oh, specs! Sorry, but you don’t understand Apple at all or the product it’s selling. Hint, it has almost nothing to do with spec wars or keeping up with the Jones’ RAM. 
    racerhomie3watto_cobra
  • Reply 18 of 66
    StrangeDaysStrangeDays Posts: 11,558member
    jcc said:
    Sorry but Apple will never do much business in India. Cook is an idiot. It’s a third world nation. You’d have as much luck getting Africans to buy Apple. India has little infrastructure, it has illiteracy rates of around 70%+, very low standards of living where a lot of people crap in the grass because there’s no plumbing, there’s probably more cows on the streets than cars. Seriously, it’s been like that for centuries and will probably take another century to get anywhere. People who bet on India will go broke before a turnaround. Cook just doesn’t understand. Westerners always think India can and will be like China. And that’s where they’re very wrong.
    Investing in a third world nation is fine — as in real estate the highest payouts are investing in up-and-coming neighborhoods, not established wealthy ones. 

    Also, when I traveled to China in the 1990s I was surprised by how third world it was — mud hut villages, people living in caves...But it’s growing up now. That’s why Apple skates to where the puck is going, not where it is. 
    Avieshekwatto_cobraradarthekatnewBeliever
  • Reply 19 of 66
    djsherlydjsherly Posts: 1,031member
    DESI DAAM said:

    I am an Indian and I can tell you why Apple will never reach a double digit Market Share in India.

    [...]

    3. When I can buy a Monster with 3 GB RAM, massive 5.5 Inch screen, 32GB Internal and 128GB expandable storage, carved out of high grade Aluminium, having the latest processor and running the latest Nougat or Oreo at 1/3rd the Price(Rs 8000 or $116) of an Iphone(Rs 25000 or $365), Why should I buy an iphone which has 1GB Ram, is almost 3 years old, 4.7" screen with 32GB Storage and No external Storage at all?

    Oh, specs! Sorry, but you don’t understand Apple at all or the product it’s selling. Hint, it has almost nothing to do with spec wars or keeping up with the Jones’ RAM. 
    I do think you’ve possibly missed the point. OP gave you some insight into the way Indians think. Its in the part you redacted and they seem to absolutely perceive these things in terms of spacs rather than experiences. 

    The real challenge is to get these potential users to think behind the spec wars and understand how APple adds value rather than cost to peoples lives. 
    Avieshekgatorguyelijahgroundaboutnowcommand_fmuthuk_vanalingam
  • Reply 20 of 66
    zimmermannzimmermann Posts: 279member
    nunzy said:
    Apple should just get out of India altogether.  It's not exactly an iPhone-like place. 

    There's plenty of other countries in the world with more wealthy people.  That is where Apple needs to expand.

    Ban India! 
    Are you a Russian troll?
    Avieshekwatto_cobranunzyanantksundaramStrangeDays
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