Apple's new India chief pursues aggressive strategy to revive cold iPhone sales

Posted:
in iPhone edited August 2018
Despite recent claims to the contrary, the new head of Apple's India operations, ex-Singapore executive Michel Coulomb, is reportedly pursuing an aggressive strategy to save iPhone sales in the country, which have dwindled to just 1 percent of the local phone market.

iPhone 8


Coulomb was the one responsible for kicking out three sales executives in June, Bloomberg said on Monday, citing multiple sources. He then spent three days with senior workers from across the country at the company's sales and marketing headquarters in Gurugram, where he unveiled a strategy to fix iPhone sales.

This includes signing better third-party retail deals with higher sales targets, overhauling relationships with independents, launching long-planned first-party stores, and offering apps and services that better address Indians.

Of special interest is the revelation of a revamped Apple Maps, expected by 2020. The sources didn't specify what might be in the redesign, other than it fixing flaws currently impacting India.

The company is slowly rolling out more detailed first-party map data beginning with iOS 12 betas, and India could theoretically get access to that improved coverage by 2020. Upgrades might also finally bring turn-by-turn directions, a feature that's often the reason people use a service like Apple Maps or Google Maps in the first place.

Apple's products have been deficient in India in other ways. There's still no support for Apple Pay for instance, and Siri -- usually considered the best assistant in terms of language support -- still can't handle Indian languages.

It remains to be seen if sales and service changes will be enough, since Apple might not be able to overcome basic economic obstacles. Most shoppers can't afford to buy even the locally-assembled iPhone SE, instead aiming for an average budget of 10,000 rupees, or about $150. Bloomberg notes that someone can spend $100 in the country and get a Xiaomi Redmi 5A, which is in some ways technically superior to the SE.

That leaves people with little means or incentive to buy most other iPhones, which are costlier still not just because of their specifications but because of import duties.

Comments

  • Reply 1 of 14
    GG1GG1 Posts: 276member
    ...ex-Singapore executive Michel Coulomb...
    What a great name for an electrical engineer. (just a general comment)
    elijahgJWSCbshank
  • Reply 2 of 14
    elijahgelijahg Posts: 1,006member
    But but but market share doesn't matter..! Just make them even more expensive so the profit margin is >80%! /sarcasm
    avon b7
  • Reply 3 of 14
    FolioFolio Posts: 636member
    Another excerpt from the Bloomberg piece:

    The 2020 revamp is supposed to fix Maps’ failings, say the people familiar with Apple’s plans, but so far, the Maps development office the company set up in Hyderabad in 2016 has mostly been used for editing map data in other parts of the world. For now, Google dominates the maps market, and along with Facebook controls much of the developer community. Google and Amazon.com’s voice assistants are much far ahead of Siri when it comes to understanding Indian languages and accents.

    Vijay Shekhar Sharma, CEO of Indian digital payments company Paytm, says he hasn’t bothered to integrate his services with the iPhone because iOS users represent such a tiny slice of the market. Like the BlackBerrys of old, the iPhone’s biggest selling point, says Sharma, is relatively high data security for the privacy-conscious. Otherwise, unless you really love Apple, he says, “there aren’t many reasons to buy this expensive phone.”

    1. Reply 4 of 14
      rogifan_newrogifan_new Posts: 4,194member
      elijahg said:
      But but but market share doesn't matter..! Just make them even more expensive so the profit margin is >80%! /sarcasm
      Honestly I’m not sure how Apple competes in India. I thought Apple’s MO was to be an aspersional brand, to acquire customers as they move into the middle class. Is that possible in India?
    2. Reply 5 of 14
      FolioFolio Posts: 636member
      The good news not mentioned in all this is that users in India upgrade their smartphones much faster than customers in US, UK, and China, according to BAML survey of nearly 50,000 users in those countries (24K in India). So things can change fast, once Apple gets it act together.  45% in India upgrade EVERY YEAR, said 30JUL2018 report. A short extract from report:

      "Across the four countries, respondents in emerging markets seemed more likely to consider switching to the iPhone with their next upgrade (see chart 20). A lower price dominated across all regions as a key potential reason to switch. We note that in India, a better camera was noted by a similar % of respondents as a lower price (18% vs. 19%)." Graph also details what customers willing to pay in each country, but doesn't paste.  [Erratum: In a prior post I was correct in saying UK buys most used phones of these four nations; but mistaken in saying US was next. US buy least used phones of these four nations]

    3. Reply 6 of 14
      FolioFolio Posts: 636member

      GG1 said:
      ...ex-Singapore executive Michel Coulomb...
      What a great name for an electrical engineer. (just a general comment)
      Ha! Yes, Apple is stretching way back to origins here. Hard to believe that Coulomb in Paris rubbed elbows with Benjamin Franklin.
    4. Reply 7 of 14
      Folio said:
      45% in India upgrade EVERY YEAR, said 30JUL2018 report. A short extract from report
      Upgrade would be a misnomer, I would assume. More like "replace" one low cost functioning (hand over to family members)/non-functioning device to another low-cost device. 3-year old entry level iPhone 6s with 32-GB internal memory costs about $500 (Rs. 35000+) in India, well above the price of most of the phones sold here. Hard to imagine many people who are intending to buy a "new phone" would line up to get a 3-year old phone.
      avon b7elijahg
    5. Reply 8 of 14
      One of the most perplexing things about Apple's marketing strategy in India is its refusal/half-hearted embrace of sales through the EMI route using telecom carriers. This (EMI through large dealers) is the primary way the middle class in India purchases big ticket white goods and other aspirational stuff as it enables them to own stuff they couldn't otherwise afford as a straight cash purchase.
      muthuk_vanalingamwatto_cobra
    6. Reply 9 of 14
      elijahg said:
      But but but market share doesn't matter..! Just make them even more expensive so the profit margin is >80%! /sarcasm
      Honestly I’m not sure how Apple competes in India. I thought Apple’s MO was to be an aspersional brand, to acquire customers as they move into the middle class. Is that possible in India?
      All Tim Cook can do is wait for India's consumer to make more money in the future. I heard about phone sales in India and at this point in time there's almost nothing Apple can do. People in India are happily buying phones closer to feature phones and they're running KaiOS that can cost as low as $22 and basically just sip data from low-end phone plans. Even the telecoms hate that cheap stuff. Almost no one in India is going to buy an iPhone and even if M. Gandhi is reborn carrying an iPhone, Apple loses. No one at Apple can be held responsible for this. This is the proverbial trying to get blood from a beet sort of scenario. Anyone who starts criticizing Apple about not grabbing phone market share is a damn idiot and should be tossed into the Ganges sewer-way. They need to stop focusing on these billions of potential consumers and grasp the reality of the India consumer's current state. Sure Apple can acquire customers over time but it's going to be slow, slow going. For the news media to be spouting about the iPhone failing in India, they're just stupid and narrow-minded. Apple is building nothing suitable for the typical Indian consumer masses. As an Apple shareholder, I'd tell the Indian consumer NOT to buy an iPhone and buy something practical in terms of cost. Spend their money on education, health and sanitation before thinking about owning an iPhone. It would be like some homeless dude leasing a BMW to drive around in and that makes no sense at all. Apple doesn't need the India consumer right now so if only a token amount of iPhones is sold there each year, good for Apple.
      edited August 2018 elijahg
    7. Reply 10 of 14
      canukstormcanukstorm Posts: 1,970member
      elijahg said:
      But but but market share doesn't matter..! Just make them even more expensive so the profit margin is >80%! /sarcasm
      Honestly I’m not sure how Apple competes in India. I thought Apple’s MO was to be an aspersional brand, to acquire customers as they move into the middle class. Is that possible in India?
      This poster (AnandC) on a Macrumors forum said it well:

      https://forums.macrumors.com/threads/apple-plans-revamped-india-strategy-with-official-stores-year-long-iphone-deals-and-improved-apps.2131198/#post-2632325

      edited August 2018
    8. Reply 11 of 14
      rossb2rossb2 Posts: 52member
      Apple needs a marketing strategy, making it clear to Indians that iphones get free software updates for 4-6 years, compared to Androids 2 years. The idea being you keep your phone for much longer. Of course, if you only have $150 to spend on a phone, there are limits. Lets say you could convince an Indian to spend $450 every 6 years compared to $150 every 2 years for Android. Of course, $450 may not be enough.
      watto_cobra
    9. Reply 12 of 14
      gatorguygatorguy Posts: 21,108member
      elijahg said:
      But but but market share doesn't matter..! Just make them even more expensive so the profit margin is >80%! /sarcasm
      Honestly I’m not sure how Apple competes in India. I thought Apple’s MO was to be an aspersional brand, to acquire customers as they move into the middle class. Is that possible in India?
      All Tim Cook can do is wait for India's consumer to make more money in the future. I heard about phone sales in India and at this point in time there's almost nothing Apple can do. People in India are happily buying phones closer to feature phones and they're running KaiOS that can cost as low as $22 and basically just sip data from low-end phone plans. Even the telecoms hate that cheap stuff. Almost no one in India is going to buy an iPhone and even if M. Gandhi is reborn carrying an iPhone, Apple loses. No one at Apple can be held responsible for this. This is the proverbial trying to get blood from a beet sort of scenario. Anyone who starts criticizing Apple about not grabbing phone market share is a damn idiot and should be tossed into the Ganges sewer-way. They need to stop focusing on these billions of potential consumers and grasp the reality of the India consumer's current state. Sure Apple can acquire customers over time but it's going to be slow, slow going. For the news media to be spouting about the iPhone failing in India, they're just stupid and narrow-minded. Apple is building nothing suitable for the typical Indian consumer masses. As an Apple shareholder, I'd tell the Indian consumer NOT to buy an iPhone and buy something practical in terms of cost. Spend their money on education, health and sanitation before thinking about owning an iPhone. It would be like some homeless dude leasing a BMW to drive around in and that makes no sense at all. Apple doesn't need the India consumer right now so if only a token amount of iPhones is sold there each year, good for Apple.
      The reason the media reports the story is because Tim Cook promoted India as the next important market for Apple, calling it "a top 5 priority" and even comparing India potential to China. As little as a year ago he was bragging about "strong double digit sales growth in India" and everything Apple had to say about China was extremely bullish. There are AI posters here who were jumping on the India bandwagon. 

      ...Yet today there's stories that Apple's share has fallen to only 1% of the market.  That it's not working as planned so far is unusual for Apple and thus news fodder.  
      edited August 2018 canukstorm
    10. Reply 13 of 14
      nunzynunzy Posts: 662member
      gatorguy said:
      there's stories that Apple's share has fallen to only 1% of the market.  That it's not working as planned so far is unusual for Apple and thus news fodder.  
      India's 1% are very wealthy. 

      So long as their costs don't exceed their income it's all gravy. Apple will never rush to the bottom.
    11. Reply 14 of 14
      elijahgelijahg Posts: 1,006member
      elijahg said:
      But but but market share doesn't matter..! Just make them even more expensive so the profit margin is >80%! /sarcasm
      Honestly I’m not sure how Apple competes in India. I thought Apple’s MO was to be an aspersional brand, to acquire customers as they move into the middle class. Is that possible in India?
      The middle class in India still gets a relatively tiny proportion of disposable income compared to middle class Westerners. iPhones are still incredibly expensive in India compared to other phones, and as others have said Indians seem fine with cheap $30 feature phones. Apple's $450 iPhone 6 hasn't a chance against that, and it's viewed as "old" despite having 100 times the features of a $30 feature phone.

      The 6 probably costs Apple $100 to make nowadays, so if they really want India there're going to have to slash profit margin. But we all know Cook won't do that. People here are generally willing to pay more for iOS due to the superior experience, but with an essentially collapsed market share Apple's going to really struggle to get developers to write apps for iOS, and there'll be no friends recommending the Apple experience. You'd be a bit of a lone ranger. 
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