APPLE’S PARCHED ORCHARD IN INDIA

Does Apple’s presence and the subsequent marketing strategy make any sense in India?

No!

Few months ago, when Apple CEO Tim Cook was in India, he stressed that Apple is betting big on India and is preparing for the day when India would become the next China of the smartphone revolution. He said that India is at same juncture in telecom revolution where China was some 7 to 10 years ago.

Yes, India is going to be the next big thing in telecom after America and China. It has already replaced America as the market having second largest smartphone user base. And since it has immense untapped potential, it is going to be the darling of whole world, including companies from America and China – either for hardware or software.

India’s smartphone user base is at 220 million while the number of mobile subscriptions in the country has reached to 1.1 billion is expected to scale up to 1.4 billion by 2021. Going by the base 220 million smartphone users, the smartphone penetration in India is still at 20% of the overall mobile phone subscription.

So, that is huge..huge opportunity.

Smartphone shipments to India grew at over 20% the last year. This year, India is expected to buy around 150 million smartphones. According to some estimates, the smartphone bases is projected to cross 700 million mark by 2020. It may be even faster than that as technological advancements are on the verge of making Indian telecom a data driven market. Smartphone prices are rapidly coming down, especially of 4G and LTE enabled devices. And as the Indian government is betting big on smartphones to drive its digital governance plan, it is just waiting to happen.

Now if Tim Cook sees India market where Chinese telecom sector was some 7 to 10 years ago, that would be, but India may bridge this gap much sooner than he would have calculated. It may be by 2019 or 2020.

Since Apple went on to increase falling prices of its iphone 6, 6S and 5S to further beef up its luxury brand perception and has launched iPhone 7 at the same price points, from Rs. 60,000 to Rs. 92,000, it seems Apple and Tim Cook have miscalculated the time when India would be finally ready to take off, as was the case with China.

Indian smartphone market has already taken off. Most of the new and replacement mobile phones are going to be smartphones as data prices have come crushingly low with the entry of a new operator, Reliance Jio, that has announced to charge only for data (and not for voice).

To continue..

©SantoshChaubey 

INDIA’S NO TO APPLE’S REFURBISHED PLANS

Apple has received a big jolt to its efforts to capture a dignified share in the Indian smartphone market.

As reported, the Indian government has rejected Apple’s plans to sell refurbished iPhones in India.

Now, selling old iPhone – Apple may see that as a viable strategy, and the company sells refurbished iPhones in some markets including the US

But it was never a good idea to try it in India.

Especially after the fact that Apple has goofed up badly on its India strategy.

And the most direct way to say it is – Apple has not treated India as a dignified market so far.

India, the third largest smartphone market, that would overtake next year Apple’s home market in US, that is now almost saturated, is a priority market for everyone – not just in the telecom segment.

The market with over 1000 million mobile connections but with just 225 million smartphone users is a market with an enormous potential to tap. And it has not happened in a day.

What India is today for telecom players (including cellphone manufactures), China was five years ago. And companies with a major presence in India saw that and have invested significantly here, creating their base.

None of them have undermined India – unlike Apple.

And now Apple is paying the price. Or to say, it is the beginning of the bad phase for the largest corporation of the world.

The US has no growth prospects for iPhone as it has already an absolute domination there. We will see an increasingly hostile China as Chinese companies go global with their smartphone ambitions. In fact, as per the latest data on global shipment of smartphones, three companies out of top five are Chinese – Huawei, Oppo and Vivo – at 3,4, and 5.

That growing realization has forced Apple to now look for a wider presence in India.

But the million dollar question is – can Apple raise its share to a dignified level, from the current 2% – in a market that it thought was not smart enough to appreciate its globe-trotting iPhone?

Apart from a few, majority of the consumers don’t view iPhone positively. For them, buying an iPhone has never been a value proposition, especially when Indian customers see that Apple launches iPhone in India in the last tranche of its shipments, after catering to every other market; especially when they see the same iPhone has been priced much higher in India; and especially when they see other elite smartphones priced much lower and launched at the same time in India as the other markets.

In fact, many who can afford iPhone don’t go for it because its bloated price from them is a sheer waste of money.

Apple intended to establish iPhone as the most premium smartphone brand in India and deliberately kept it out of reach of majority by maintaining price barriers. That sent a message that Apple was never in sync with Indian sensitivities and overlooked the Indian customer.

And Apple cannot replenish its fortunes by sustaining with that strategy.

©/IPR: Santosh Chaubey – https://santoshchaubey.wordpress.com/

APPLE TO IGNORE INDIAN SMARTPHONE MARKET AT ITS OWN PERIL

Apple sales are down, for the first time in 13 years. iPhone shipments are down 16% to 51 million units in the last financial quarter. Sales are down 13% to $50.6 billion. Apple stock is down around 7% wiping out $40 billion in value in a single day when Apple announced its sales data.

Apple CEO Tim Cook, while presenting the figures, reiterated his concerns about saturation in the smartphone market.

And indeed it is happening. The latest report by the market research firm IDC, on April 27, a day after Apple came out with its earnings, shows that the global smartphone market remained almost flat with just 0.2% growth in shipments in the last quarter.

While it concerns every smartphone maker, it should be more worrying for Apple.

Its main market, the US, is near saturation. It growth driver, the China region, saw a whopping 26% decline. And Apple is not even 2% of the market size in the world’s third largest smartphone market, India, despite being in the country for years. Apple has ignored India in a questionable pursuit to establish itself as a premium, upmarket brand, thus missing out on the opportunity to create a solid base in the country.

India is projected to overtake the US next year to become the second largest smartphone market as Morgan Stanley concludes. And the distinction the Indian market has now is while China’s economy is slowing down, India is now the world’s fastest growing market.

Add to it the demographic dividend – according to the Morgan Stanley report, smartphone market in India is still just 18% of its population with 225 million subscribers.

So, there is a huge potential to tap – with the right kind of mix – like an ever increasing base of Middle Class, a fastest growing economy with over 80% tele-density and a young population base. India has already the world’s largest youth population of some 360 million people in 10-24 age-group and the country will be the youngest nation demographically by 2020.

So, all you have to do is to remain there, as a sincere, responsive brand when the growth takes off. And it is happening in the Indian smartphone market now.

Apple is now pushing for its presence in volume segments in India with the recent launch of iPhone SE but it is too little too late, and again, is coupled with a poor insight. In a price conscious market like India, that is projected to be the world’s largest middle class by 2030, no one would go for obsolete versions of iPhones or an exorbitantly priced substandard product, iPhone SE at over $500, when other vendors including Samsung and Chinese entrants are offering world class products at much cheaper price points.

Samsung is present with a flagship product in every pricing segment in the Indian smartphone market while the top-end models of Xiaomi, Gionee, Lenovo, Oppo, Vivo and Micromax, all are priced at around $400.

Apple needs to follow the basics of branding here. Apple needs to earn people’s respect in India. The astronomically priced iPhone is certainly not an exciting prospect for an Indian smartphone user, especially when those with access to the US and other markets can have the gadget for a much lower price.

Samsung, the South Korean behemoth, sits here at the top, with a comfortable margin from its nearest rival, a home grown Indian company, Micromax.

While Apple has failed with its strategy in the Indian market, Samsung has adeptly captured it.

And the fact that Samsung’s top-end smartphones are priced at around $800, near iPnone’s around $900-1000 tag, and that in spite of that they sell well, makes Apple’s marketing strategy in India even more a pathetic case study. Samsung has 24% market share in the smartphone segment in India while Apple is not even 2% and it tells a lot.

India is the market now the world is looking at, for smartphone, or for every other segment the market consumes. Analysts say the Indian smartphone market today is what China was five years ago – with immense potential of growth.

Apple seems to have missed this growth story. And its current marketing strategy in India says the company have learnt nothing from that.

©/IPR: Santosh Chaubey – https://santoshchaubey.wordpress.com/

APPLE’S IPHONE: ‘BEAUTY WITH A BRAIN’ TAG SLIPPING?

Sales are down, the profit basket has shrunk, for the first time in Apple’s last 13 years, after 2003, in the last financial quarter. And it is driven by a massive drop in iPhone sales – the first time ever in the iPhone history. And everyone is writing about it.

Why it is so significant to write volumes about it?

After all, it happens with every brand, especially when it is about a tool of technology – as every pioneering technology is bound to become obsolete with time.

But Apple is different – for the way it has created a visible brand perception around the world – something that we can sum up as ‘beauty with a brain’ concept – something unheard of before Apple brings its products – yes that has been the unique hallmark of Apple making its products since Macintosh in 1984 stand out in the market – creating a cult following – that reached to phenomenal levels since the iPhone launch in 2007.

But the ebb is coming now.

Because of its over-reliant on iPhone only!

The first quarter slump in iPhone sales is here and it is massive – 10 million units – from 61 to 51 million units a year ago.

The Apple story since 2007 is the iPhone story – the smartphone that took the world by storm – registering stupendous growth year-over-year – from 3.7 million units in 2007 to 231 million units in 2015 – that is staggering over 600%.

In fact the world’s biggest listed company is solely dependent on iPhone for two thirds of its revenue. iPhone has made Apple the biggest corporation on Earth.

But that cannot last forever.

Unless Apple comes with another blockbuster product or some blockbuster enhancement to the existing line of iPhones!

Because, it’s largest market in the US is nearing saturation.

Because, it’s second most important market in China is the chief culprit in bringing down its revenue – 26% down in Hong Kong and Taiwan and 11% in mainland China.

Chinese companies are fast emerging as Apple’s alterative for ‘beauty with a brain’ smartphones with much cheaper prices and can replace Apple easily in a market that has been Apple’s growth engine. And we should always remember that China is a protectionist regime and would see interests of its home grown companies first.

Because, Apple has failed to capture the third largest smartphone market in the world, i.e., India. Apple’s market share in India is still less than 2%. Moreover, according to a Morgan Stanley report, India is projected to become the second largest smartphone market by 2017 overtaking the US.

Though, after faltering for years, Apple is now trying to tweak its strategy in India, offering older versions of iPhones for lower prices or launching the cheaper iPhone SE. But that is not working. The impression goes that Apple sees India as a dumping ground for old versions of iPhones. At $500, iPhone SE, a low priced version with a smaller screen size, and resembling much older iPhone 4S, was again a failure. People can have a much better smartphone than iPhone SE at a much lower price in the Indian market.

For most Indian consumers, they may still see beauty in the iPhone range but they fail to find any brain there.

Though for different reasons, the trend is spreading across the world – in other markets. Apple has been able to maintain the beauty quotient of iPhone but cosmetic measures like enhancing screen size or upgrading camera or operation system or introducing a personal virtual manager or even a biometric identification system with touch ID fingerprint sensor are now proving inefficient in keeping the ‘brainy’ tag of iPhone intact. These technologies are good but can’t act as differentiators for your brand identity because everyone else is also coming with them.

So, where is the new market for Apple – that can sustain its astonishingly high market capitalization and revenue figures?

So, unless Apple comes with something new, an innovation sort of offering a gadget that we see in Sci-Fi flicks, means it is ahead of the competition and thus creates new markets for its products in not so ‘price conscious’ markets like India, the trouble is going to grow.

A crude way to say that is, people have become sceptical of Apple’s motives, after just marginal enhancements in every subsequent generation iPhone, without offering any breakthrough.

iPhone is fast losing its ‘beauty with a brain’ tag. The law of average is catching up with it.

©/IPR: Santosh Chaubey – https://santoshchaubey.wordpress.com/