Apple plots iPhone price hikes and reduced outlet numbers in India shakeup

Posted:
in iPhone edited March 14
Apple will stop selling the iPhone 6 and iPhone 6 Plus in India, senior industry executives claim, as part of a strategy to reinforce the iPhone's premium image, a move that also aims to increase the price of iPhones sold in the market and to change where it is being sold to consumers.

Apple CEO Tim Cook (left) meets with Indian Prime Minister Narendra Modi.
Apple CEO Tim Cook (left) meets with Indian Prime Minister Narendra Modi.


India has been a difficult market for Apple to establish the iPhone within, with shipments in the market failing to live up to expectations. Despite selling low-priced models in the country, Apple's market share is in the extremely low single-digit percentage, but the company may soon change how it handles the market.

According to industry executives speaking to the Economic Times, Apple is looking to stop sales of the iPhone 6 and 6 Plus. Currently assembly partner Wistron is producing the models in the country, though it has recently been given permission by the government to proceed with plans to change its production lines to make the newer models.

Apple wants to reestablish its premium positioning for the market, and part of the process involves increasing the base cost of iPhones. The entry level iPhone 6s and iPhone 6s Plus will go up in price by about 5,000 rupees ($72), and it had gradually increased the pricing of the iPhone SE before its removal from brick-and-mortar retailers.

"It wants to reinforce the brand's 'premiumness' in the Indian market and increase average selling prices," one executive claimed.

At the same time, Apple is looking to pare down the number of outlets that are selling the iPhone. Distributors have been advised neighborhood stores that are less than 350 to 400 square feet in size and those selling less than 35 devices per month should not be selling iPhones, with sales promoters and fixtures being pulled from underperforming outlets due to cost effectiveness.

Apple instead wants more Apple Authorized Resellers over 500 square foot in size, outlets dedicated to Apple sales, with each trade partner to operate more than one store each. It is suggested the change is to reduce the number of trade partners Apple has with India and to "deepen the relationship" with them.

There is already one alleged casualty in the distributors list, with Apple's partnership with RP Tech said to be ending in April, shifting more of its attention to Ingram Micro and Redington. While Apple worked with five distributors in India during 2018, it has already terminated its work with Brightstar and HCL Infosystems, bringing the list down to three.

Comments

  • Reply 1 of 15
    All I can say is - Good luck with this strategy.
    tomjunior39kestral
  • Reply 2 of 15
    India just isn’t a premium market, so I guess this tends to match them give up on India (at least temporarily).
    kestral
  • Reply 3 of 15
    flydogflydog Posts: 186member


    According to industry executives... 
     if unnamed “industry executives” said it then it must be true.
  • Reply 4 of 15
    genovellegenovelle Posts: 861member
    India just isn’t a premium market, so I guess this tends to match them give up on India (at least temporarily).
    Apple is not a commodity company so it’s not a good idea to fight for an unprofitable client. On the other hand, there are a much small percentage of the wealthier cast in India, so this move appeals to them. At the same time, if they can build a manufacturing hub there while increasing the fortunes of the community, it would be a win win. Eventually their market will expand to be able to afford more premium goods. I always thought it was odd they were doing in India what they know does not work for them. 
  • Reply 5 of 15
    avon b7avon b7 Posts: 3,318member
    This doesn't make a lot of sense.

    If the iPhone 6s is available today, a potential client for that phone is not a clear cut candidate for any X series phone.

    Eliminating that 'low' cost option simply serves to reduce already low sales, leaving potential low end iPhone purchasers without options.

    If they replaced the iPhone 6 series options with iPhone 7 series options at the same price points, it would make a little more sense.

    The part that describes minimum floorspace and resources dedicated to Apple products has already been tried in Europe and didn't do much in the way of consumer benefits.

    People lost access to reputable but small dealers and were forced to travel longer distances to receive worse service from companies that were being pushed by Apple to 'get the sale' (this was before the Apple Retail Stores though).

    Apple's problems in India are the same as elsewhere. Competition and not dealing with it adequately.

    The Mate 20 Pro retails for less than an iPhone XR which makes any new Apple phone a much harder sell.

    Huawei is planning up to 1,000 experience stores in India by next year. It is gunning for the high end market as well catering to the mid to low end with new phones.

    https://telecom.economictimes.indiatimes.com/news/chinas-huawei-bets-big-on-offline-retail-plans-1000-experience-stores-by-2020/66826686

    It also has Honor in the Indian market.

    If Apple decides to go 'boutique', they will basically throwing in the towel.
    muthuk_vanalingam
  • Reply 6 of 15
    frantisekfrantisek Posts: 385member
    If India would be small country with 10-30 millions of inhabitants nobody would care about it.But Billion + market can not be let without care.
    edited March 14
  • Reply 7 of 15
    mac_128mac_128 Posts: 3,377member

    and it had gradually increased the ricing of the iPhone SE before its removal from brick-and-mortar retailers. 

    So, this article confirms they are no longer selling the SE in India, at least not in brick-and-mortar retailers?
    edited March 14
  • Reply 8 of 15
    kestralkestral Posts: 219member
    The worst job in the world has to be the head of Apple India. On one hand the average Indian makes $120 US dollars per month. You got Tim Apple demanding growth in sales on the iPhone. But then you have to drive sales without a low price product to maintain a premium brand. How are people that make $120 USD per month supposed to afford an iPhone SE let alone an iPhone 8 or XR or XS? And it seems every year Tim Apple fires the head of Apple India. Fuck that job.
  • Reply 9 of 15
    So Apple's strategy is:

        Higher Prices
    +  Fewer Stores
    =============
        Higher Sales


    Doesn't seem likely.

    muthuk_vanalingam
  • Reply 10 of 15
    avon b7 said:
    This doesn't make a lot of sense.

    If the iPhone 6s is available today, a potential client for that phone is not a clear cut candidate for any X series phone.

    Eliminating that 'low' cost option simply serves to reduce already low sales, leaving potential low end iPhone purchasers without options.

    If they replaced the iPhone 6 series options with iPhone 7 series options at the same price points, it would make a little more sense.

    The part that describes minimum floorspace and resources dedicated to Apple products has already been tried in Europe and didn't do much in the way of consumer benefits.

    People lost access to reputable but small dealers and were forced to travel longer distances to receive worse service from companies that were being pushed by Apple to 'get the sale' (this was before the Apple Retail Stores though).

    Apple's problems in India are the same as elsewhere. Competition and not dealing with it adequately.

    The Mate 20 Pro retails for less than an iPhone XR which makes any new Apple phone a much harder sell.

    Huawei is planning up to 1,000 experience stores in India by next year. It is gunning for the high end market as well catering to the mid to low end with new phones.

    https://telecom.economictimes.indiatimes.com/news/chinas-huawei-bets-big-on-offline-retail-plans-1000-experience-stores-by-2020/66826686

    It also has Honor in the Indian market.

    If Apple decides to go 'boutique', they will basically throwing in the towel.
    Absolutely spot on with your observations.
  • Reply 11 of 15
    avon b7 said:
    This doesn't make a lot of sense.

    If the iPhone 6s is available today, a potential client for that phone is not a clear cut candidate for any X series phone.

    Eliminating that 'low' cost option simply serves to reduce already low sales, leaving potential low end iPhone purchasers without options.

    If they replaced the iPhone 6 series options with iPhone 7 series options at the same price points, it would make a little more sense.

    The part that describes minimum floorspace and resources dedicated to Apple products has already been tried in Europe and didn't do much in the way of consumer benefits.

    People lost access to reputable but small dealers and were forced to travel longer distances to receive worse service from companies that were being pushed by Apple to 'get the sale' (this was before the Apple Retail Stores though).

    Apple's problems in India are the same as elsewhere. Competition and not dealing with it adequately.

    The Mate 20 Pro retails for less than an iPhone XR which makes any new Apple phone a much harder sell.

    Huawei is planning up to 1,000 experience stores in India by next year. It is gunning for the high end market as well catering to the mid to low end with new phones.

    https://telecom.economictimes.indiatimes.com/news/chinas-huawei-bets-big-on-offline-retail-plans-1000-experience-stores-by-2020/66826686

    It also has Honor in the Indian market.

    If Apple decides to go 'boutique', they will basically throwing in the towel.
    Absolutely spot on with your observations.
    I think they basically try the same strategy in India as everywhere else. Apple aims to be premium, and through that develop a customer want. Same as Nike selling to 20 year old, thereby creating a want for their product in older people. Let’s see how it goes.
  • Reply 12 of 15
    kestralkestral Posts: 219member

    I think they basically try the same strategy in India as everywhere else. Apple aims to be premium, and through that develop a customer want. Same as Nike selling to 20 year old, thereby creating a want for their product in older people. Let’s see how it goes.
    The difference is, a pair of Nikes is $100-200. An iPhone is over $1,000.
  • Reply 13 of 15
    I think this might work if it is combined with the promotion of the second hand market. Apple has stated it wanted to create a market for repurposing good older iPhone models that are traded in their upgrade programs. This could be thier intention, and as the Indian market gets more affluent they will want to upgrade to the new current models that are available when they can afford them. Meanwhile they are part of the ecosystem and still using a quality product, just like a older BMW or Benz are not frowned upon neither will an iPhone. 
  • Reply 14 of 15
    kestral said:

    I think they basically try the same strategy in India as everywhere else. Apple aims to be premium, and through that develop a customer want. Same as Nike selling to 20 year old, thereby creating a want for their product in older people. Let’s see how it goes.
    The difference is, a pair of Nikes is $100-200. An iPhone is over $1,000.
    Isn’t there a large and growing affluent group of people in India? That drive new Mercedeses an want only the best. Saying to each other: big is nice, much is tasty and expensive is good...
  • Reply 15 of 15
    badmonkbadmonk Posts: 754member
    You know I have to respectively disagree with the informed sentiments of the posters, Apple may not have the best culture to conquer India and it might be best to take over the affluent and urban middleclass markets and than work downstream as the middleclass demands a better experience.  The benefit of Apple comes not just from owning an iPhone but moving on to experiencing the entire ecosystem (iPhone, AW, airpods, MacBook, Homepod and iPad).

    It takes a certain amount of affluence to do this.  Maybe India needs it own solution that doesn’t involve Apple trying to sell to the masses.
Sign In or Register to comment.