Apple facing uphill battle in India from Samsung mindshare, factory expansion

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in iPhone
Other than just battling the Indian government for concessions and dealing with the shaky financial situation of the populace, Apple is also fighting a large and aggressive Samsung presence in the country for the minds of the consumers.




According to a new report from the Wall Street Journal, Apple is making little headway in India for more than just cost reasons. Fighting to even maintain its 3 percent market share, Apple will face new competition from Samsung clutching 27 percent of the marketplace, and expansion in the form of a new $760 million facility in the outskirts of India's capital city.

The report cites recent analytics seeing local Indian vendors market shares plummeting in the last year, at the expense of Oppo, Vivo, and BBK Electronics offerings in the country. Samsung is impacted as well, but still commands nine times the market presence that Apple does.

But, it's not clear how much profit the other manufacturers make in the country. Analysts estimate that more than 75 percent of the phones in the country sell for less than $250, with 95 percent selling for less than $500. The overall average of all smartphones sold is estimated to be right around $150.

According to the new report, Apple is considering flagship stores in New Delhi, Bangalore, and Mumbia -- all three locations where most of India consumers wealth is centered. This is in addition to the Apple Authorized Reseller expansion that Apple was said to be examining in March.

Trade partners are reportedly already setting up the Apple Authorized Reseller locations, with the first batch including places in New Delhi and areas of the National Capital Region, such as Vasan Vihar and Malviya Nagar. Other cities including Mumbai, Bengaluru, Pune, and Chandigarh will also see reseller openings in the future.

In early March, the iPhone 6 went on sale exclusively through Amazon for $435, with the revived smartphone offered with an unusual 32 gigabytes of storage, similar to sales in a few other markets. The iPhone SE has been seen for sale in India new for as little as $320.

Apple has also floated the idea of selling refurbished iPhones in India, providing more modern generations of the mobile device to the population at a low cost, to try and combat the high sales of cheap Android smartphones by Samsung, and others. So far, the government has pushed back on this idea, fearing that this could flood the market with cheap and used goods, and undermining its "Make in India" program to boost local manufacturing efforts.

Apple's push for used phone sales in India was proposed as one of a number of conditions for the company to start manufacturing new iPhones in the country, along with tax breaks and other requests.

Assembly of the iPhone SE at the Karnataka Wistron facility began in mid-May, with the first units said to hit customers in a few weeks after the start of construction. Officials in the Indian government hope the new price for the iPhone SE will drop down by as much as $100 compared to the current local price, though Apple is likely to try and avoid too much of a reduction in order to preserve its margins.
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Comments

  • Reply 1 of 29
    I don't think Apple cares much for market share in emerging markets. If they did they could easily copy the Samsung strategy of selling models restricted to emerging markets, for example an iPhone that is only sold in India. The challenge for Apple is they are talking up Services revenue as an engine for growth. To keep that growing market share will be required. Selling 2 and 3 year old phones and refurbs won't get you there.
    anton zuykovmacky the mackyjony0
  • Reply 2 of 29
    macxpressmacxpress Posts: 5,808member
    I would think selling 2-3yr old phones would create an issue eventually...now you have all of these old phones out there and you have to try and make iOS compatible with them with new features. Every release is starting to take more and more older devices away. 

    Not everyone is going to be able to afford an iPhone...selling old phones with old features isn't going to cut it. 

    I'm not sure if Apple should go down the road of making country specific phones. Seems like that would make it hard for them down the road as you'll have so many different devices compatibility would start to be an issue. 
  • Reply 3 of 29
    Other than the import taxes, is there anything actually stopping Apple today from importing refurbs and selling them in India at discounted prices? 
  • Reply 4 of 29
    bloggerblogbloggerblog Posts: 2,464member
    The 5%, who buy phones for over $500 in India, is equivalent to 20% of the US population. India has 4x the population of the entire US.

    Edit: 
    The entire iPhone marketshare in the US is about 37%, so India's 5% is actually more than half of US share.
    edited June 2017 robin huberanantksundaramRonnnieO
  • Reply 5 of 29
    lkrupplkrupp Posts: 10,557member
    Apple: Always depicted by the tech media as failing, “under pressure”, falling behind, fighting an uphill battle, never safe.

    Samsung: Always depicted by the tech media as aggressive, strong, rising, dominating, moving forward, innovating, favored.

    I guess having a CEO on trial for corruption, exploding products, being symbiotic with the South Korean government,  single family empire and dictatorship is the way to get positive press these days. 
    brucemcjdgazrobin huberStrangeDaysmacky the mackyjony0radarthekatwatto_cobratokyojimubshank
  • Reply 6 of 29
    lkrupplkrupp Posts: 10,557member

    adm1 said:
    Other than the import taxes, is there anything actually stopping Apple today from importing refurbs and selling them in India at discounted prices? 
    Yes, the Indian government.
    jony0bshank
  • Reply 7 of 29
    adm1 said:
    Other than the import taxes, is there anything actually stopping Apple today from importing refurbs and selling them in India at discounted prices? 

    Are you implying "sell the refurbished ones as brand new at a discounted price" without letting the Indian government (and customers) know about it? Just want to understand your question correctly before commenting on it.
    edited June 2017
  • Reply 8 of 29
    In North America and Japan, smartphone=iPhone and everyone else is an inferior imitator, making paying the extra cost for an iPhone worthwhile. In other markets i.e. China, India and to a degree Europe - where Nokia's Windows Phones actually had decent market share - Android made inroads, and did so with quality and often locally branded and manufactured devices, before Apple was able to establish themselves as the market leader and best option. That's the thing: in the early days of the Android/Apple race, it was Apple devices versus Android ones that had suspect hardware, buggy software and terrible apps. Android was able to improve the hardware, OS and app store situation before Apple was able to establish a real presence in most markets. So unless you are relatively affluent AND highly influenced by western consumer culture there is no reason to reject a $200 Android device that works fine in favor of a $600 iPhone that works better. (Or a $400 iPhone SE that works better but has a 4 inch screen.) If Android was still the mess that it was with the early Qualcomm and Samsung SOCs and Gingerbread/Honeycomb/Ice Cream Sandwich operating systems, then Apple would have an opening. But since Jellybean and the Qualcomm Scorpion, Apple being better has not meant Android being bad, so it is debatable how many would switch even if Android and iOS products cost the same. You can console yourself with the realization that Samsung and the rest aren't making much profit by selling the $250 smartphones in China and India, and that Apple will make as much or more by selling a few than Samsung and the rest will by selling a lot, but that is about all there is. That may be bad for the hardware manufacturers, but Google has invested a ton on the prospect of future revenue from Android services in India. It is a long game, because while India is #1 in app downloads for Google Play by a huge margin (6 billion apps downloaded in 2016, up from 3.5 billion in 2015) India is not in the top 10 for revenue: http://timesofindia.indiatimes.com/companies/india-number-one-in-google-play-app-downloads-usage/articleshow/56680067.cms However, as Netflix is making a good amount of revenue in India from Android devices, India will be in the top 10 for Android revenue pretty soon.
    muthuk_vanalingamholyone
  • Reply 9 of 29
    robin huberrobin huber Posts: 3,958member
    adm1 said:
    Other than the import taxes, is there anything actually stopping Apple today from importing refurbs and selling them in India at discounted prices? 

    Are you implying "sell the refurbished ones as brand new at a discounted price" without letting the Indian government (and customers) know about it? Just want to understand your question correctly before commenting on it.
    Why would you think that? Apple has a well-earned reputation for honesty and value in its sales. Why would it suddenly start cheating people in a most egregious (and obvious) way? You're "loaded for bear." (Looking to pick a fight.)
  • Reply 10 of 29
    fallenjtfallenjt Posts: 4,054member
    As I said years ago, India wasn't like China from income to lifestyle perspective. Indians grow up with conputer learning in which they prefer a cheap devices that allow flexibility of manipulation, or modifications, tweaks and shits like Android phones. China and other South East Asian countries are about social status and phones are not only a life gadget but bling bling too. That's why I heard story of people who did whatever it takes to own an iPhone including selling their organs in China and SE Asia, not in India.
  • Reply 11 of 29
    holyoneholyone Posts: 398member
    In North America and Japan, smartphone=iPhone and everyone else is an inferior imitator, making paying the extra cost for an iPhone worthwhile. In other markets i.e. China, India and to a degree Europe - where Nokia's Windows Phones actually had decent market share - Android made inroads, and did so with quality and often locally branded and manufactured devices, before Apple was able to establish themselves as the market leader and best option. That's the thing: in the early days of the Android/Apple race, it was Apple devices versus Android ones that had suspect hardware, buggy software and terrible apps. Android was able to improve the hardware, OS and app store situation before Apple was able to establish a real presence in most markets. So unless you are relatively affluent AND highly influenced by western consumer culture there is no reason to reject a $200 Android device that works fine in favor of a $600 iPhone that works better. (Or a $400 iPhone SE that works better but has a 4 inch screen.) If Android was still the mess that it was with the early Qualcomm and Samsung SOCs and Gingerbread/Honeycomb/Ice Cream Sandwich operating systems, then Apple would have an opening. But since Jellybean and the Qualcomm Scorpion, Apple being better has not meant Android being bad, so it is debatable how many would switch even if Android and iOS products cost the same. You can console yourself with the realization that Samsung and the rest aren't making much profit by selling the $250 smartphones in China and India, and that Apple will make as much or more by selling a few than Samsung and the rest will by selling a lot, but that is about all there is. That may be bad for the hardware manufacturers, but Google has invested a ton on the prospect of future revenue from Android services in India. It is a long game, because while India is #1 in app downloads for Google Play by a huge margin (6 billion apps downloaded in 2016, up from 3.5 billion in 2015) India is not in the top 10 for revenue: http://timesofindia.indiatimes.com/companies/india-number-one-in-google-play-app-downloads-usage/articleshow/56680067.cms However, as Netflix is making a good amount of revenue in India from Android devices, India will be in the top 10 for Android revenue pretty soon.
    Nicely said 


    Another way to put it is that, though it may not be easy to see behind the Apple fandom mania to most Apple fans, (in forums such as this,) but, the technology gap always shrinks, there more things are produced the cheaper they become and available to every one at some point an iPhone having a marginally better technological specification won't be enough to sway people who will be too young to have lived through the glory and wonder of the first iPhone and Steve won the hearts of millions of followers loyal to Apple to this day, in the future a new war will be fought, many dont even realize the threat, but my suspicion is that Amazon not another techie like Samsung will be Apple's biggest challenger.

     Bezos is amassing a monolith that will be unrivaled in revenues, market share, diversification and also profits, no matter how wealthy Apple will be then too, Bezos will porobably just out spend them, and not on smart phones or tech gadgets either, but on what you use them for the most. Apple will always have the best overall componentry but the difference won't be the day and night difference it used to be, as nice as it might be to own a Ferrari, for most people a nice highend Merc will do just fine, Apple shines at its most brightest when you've invested in its entire ecosystem, how many can afford that when a ( "simple" to most people ) speaker will cost $350

  • Reply 12 of 29
    Here in the U.S., the benefits of the "ecosystem" go to those of us who can afford multiple devices.  Computer, iPhone, watch, iPad.  By seeding the Indian market with lower cost macs, Apple could drive developer interest and change this equation.  There may be social roadblocks to wider adoption that don't exist elsewhere, too.  
    watto_cobra
  • Reply 13 of 29
    anantksundaramanantksundaram Posts: 20,404member
    Granted it's entirely anecdotal, but consider this. When I traveled the country in December 2015, I barely saw an iPhone. Samsungs were ubiquitous. I was back traveling there in March 2017, and most of what I saw in airports and in the lobbies of fancy hotels and in fancy restaurants were iPhones. I'd say Samsungs were in the minority!

    I believe that the current 3% will grow very fast in the next few years. Will it get as high as its global share (14.5% in 2016)? Probably not. But even half that, say, a 7.5% share in equilibrium is needle-moving.

    Give Apple time. The company is not stupid. 
    radarthekatwatto_cobra
  • Reply 14 of 29
    avon b7avon b7 Posts: 7,667member
    lkrupp said:
    Apple: Always depicted by the tech media as failing, “under pressure”, falling behind, fighting an uphill battle, never safe.

    Samsung: Always depicted by the tech media as aggressive, strong, rising, dominating, moving forward, innovating, favored.

    I guess having a CEO on trial for corruption, exploding products, being symbiotic with the South Korean government,  single family empire and dictatorship is the way to get positive press these days. 
    We have to be honest. 

    Samsung actually is most of those adjectives. It's a sprawling conglomerate. People rate their SSDs, screens, phones very highly. From finished products through to components and manufacturing prowess. Credit where credit is due.

    Your perception of Apple in the tech press doesn't really reflect reality. For the best part of a decade it has been a press darling.

    However, when the Mac tech press starts banging Apple, then perhaps something is afoot.
  • Reply 15 of 29
    sreesree Posts: 152member
    adm1 said:
    Other than the import taxes, is there anything actually stopping Apple today from importing refurbs and selling them in India at discounted prices? 
    Yes, it is called 'anti-dumping' which is allowed by international law. Developing countries like india regularly put mechanisms in place to stop import of used electronics, otherwise all the e-junk in the world will get shipped to india for dismantling since labour is cheap in india. That would leave the indian environment in a mess, so by law 'used electronics' are not allowed to be imported.
  • Reply 16 of 29
    avon b7avon b7 Posts: 7,667member
    In North America and Japan, smartphone=iPhone and everyone else is an inferior imitator, making paying the extra cost for an iPhone worthwhile. In other markets i.e. China, India and to a degree Europe - where Nokia's Windows Phones actually had decent market share - Android made inroads, and did so with quality and often locally branded and manufactured devices, before Apple was able to establish themselves as the market leader and best option. That's the thing: in the early days of the Android/Apple race, it was Apple devices versus Android ones that had suspect hardware, buggy software and terrible apps. Android was able to improve the hardware, OS and app store situation before Apple was able to establish a real presence in most markets. So unless you are relatively affluent AND highly influenced by western consumer culture there is no reason to reject a $200 Android device that works fine in favor of a $600 iPhone that works better. (Or a $400 iPhone SE that works better but has a 4 inch screen.) If Android was still the mess that it was with the early Qualcomm and Samsung SOCs and Gingerbread/Honeycomb/Ice Cream Sandwich operating systems, then Apple would have an opening. But since Jellybean and the Qualcomm Scorpion, Apple being better has not meant Android being bad, so it is debatable how many would switch even if Android and iOS products cost the same. You can console yourself with the realization that Samsung and the rest aren't making much profit by selling the $250 smartphones in China and India, and that Apple will make as much or more by selling a few than Samsung and the rest will by selling a lot, but that is about all there is. That may be bad for the hardware manufacturers, but Google has invested a ton on the prospect of future revenue from Android services in India. It is a long game, because while India is #1 in app downloads for Google Play by a huge margin (6 billion apps downloaded in 2016, up from 3.5 billion in 2015) India is not in the top 10 for revenue: http://timesofindia.indiatimes.com/companies/india-number-one-in-google-play-app-downloads-usage/articleshow/56680067.cms However, as Netflix is making a good amount of revenue in India from Android devices, India will be in the top 10 for Android revenue pretty soon.
    Broadly speaking I agree with what you say.

    Tech companies are also already piecing together their own network infrastructure too. 

    Even Facebook in conjunction with another company has begun laying a 6,000Km fibre connection between the US and Europe. It isn't a proposal or wishful thinking. Deployment is already underway.

    Having data centers is necessary but guaranteeing deployment options is also something companies like Google and Facebook are very much aware of. I'm not sure how much importance Apple gives to this aspect in spite of the recent interest in satellite technology.
  • Reply 17 of 29
    anantksundaramanantksundaram Posts: 20,404member
    sree said:
    adm1 said:
    Other than the import taxes, is there anything actually stopping Apple today from importing refurbs and selling them in India at discounted prices? 
    Yes, it is called 'anti-dumping' which is allowed by international law. Developing countries like india regularly put mechanisms in place to stop import of used electronics, otherwise all the e-junk in the world will get shipped to india for dismantling since labour is cheap in india. That would leave the indian environment in a mess, so by law 'used electronics' are not allowed to be imported.
    I think you may be slightly confused about what the term "anti-dumping" means. It has nothing at all to do with "used" or "junk" or "cheap labor" (although, the dumpers sometimes are compared to the dumpees) or "environment."
    SpamSandwich
  • Reply 18 of 29
    Why is it that everything Apple seems to attempt has an uphill battle against, well, every company on the planet? I'll never understand this. Is it because Apple is too large or doesn't have enough money to compete with companies with less money? Or does it have something to do with how poorly Apple is being managed? Not every company can be the first at doing things, so there are always some companies that are going to have to play catchup. The way I see it, any company with enough resources and talent can get into a market late and still become successful. If Apple didn't think it could make any money in India, then why would Apple even bother. I know very little about wages in India but from what I've read, it seems like only single-digits of the Indian population can afford iPhones, but does that really matter. Maybe even 2% of the Indian population is good enough for iPhone sales to be worthwhile. Will Apple really have to struggle to reach that amount? Apple will just have to make do in a poor country. What's the big deal? There have to be some people in India who want iPhones and can afford them. Apple will never have anything close to high smartphone market share in India and I'm sure Apple already knows this much. Maybe Apple can make more money from selling services in India. Who knows? Apple can only try to find out. No one can tell the future that clearly.
  • Reply 19 of 29
    lkrupp said:

    adm1 said:
    Other than the import taxes, is there anything actually stopping Apple today from importing refurbs and selling them in India at discounted prices? 
    Yes, the Indian government.
    I live in the U.S. and I've never found anything inferior about Apple refurb products, so I wonder why the Indian government doesn't want them in their country. As near as I can tell, Apple refurbs are indistinguishable from brand new products in terms of quality and reliability. I think the Indian government is stiffing Indian consumers from getting a decent bargain.
  • Reply 20 of 29
    foggyhillfoggyhill Posts: 4,767member
    Why is it that everything Apple seems to attempt has an uphill battle against, well, every company on the planet? I'll never understand this. Is it because Apple is too large or doesn't have enough money to compete with companies with less money? Or does it have something to do with how poorly Apple is being managed? Not every company can be the first at doing things, so there are always some companies that are going to have to play catchup. The way I see it, any company with enough resources and talent can get into a market late and still become successful. If Apple didn't think it could make any money in India, then why would Apple even bother. I know very little about wages in India but from what I've read, it seems like only single-digits of the Indian population can afford iPhones, but does that really matter. Maybe even 2% of the Indian population is good enough for iPhone sales to be worthwhile. Will Apple really have to struggle to reach that amount? Apple will just have to make do in a poor country. What's the big deal? There have to be some people in India who want iPhones and can afford them. Apple will never have anything close to high smartphone market share in India and I'm sure Apple already knows this much. Maybe Apple can make more money from selling services in India. Who knows? Apple can only try to find out. No one can tell the future that clearly.
    It has all to do with "APPLE IS DOOMED" being a constant narrative and clickbait articles online (cause that old "Apple is doomed" spiel creates interest and clicks, no question)  of analysts to depress stocks more of the year until actual reality rescues the stock.

    This is the same SHIT being peddled 100% of the time.
    lkrupp
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