Apple's India strategy stumbles as iPhones struggle to find buyers
What's the story
In the first half of 2018, Apple has sold less than a million iPhones in India, says a report by market research firm Counterpoint. In comparison, the tech giant had sold 3.2 million iPhones in 2017. As Apple struggles to boost iPhone sales in India's fast-growing smartphone market, three top executives have also quit the company in recent weeks. Is Apple's India strategy stumbling?
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Apple is unlikely to meet last year's sales figures: Counterpoint
"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 Neil Shah, Research Director at Counterpoint.
Reasons
But why has Apple failed to boost iPhone sales?
To boost local manufacturing, the Indian government has imposed a high duty on imported electronics and components. In Apple's case, this leads to the inflated pricing of iPhones - a deterrent for price-conscious buyers. Hence, buyers looking for value devices move towards the likes of Xiaomi and Samsung. Moreover, Apple manufactures old generation iPhones in India which fail to attract buyers at their price-point.
Growing concerns
Amid sluggish iPhone sales, three top Apple executives have quit
Further, in the recent weeks, three top Apple India executives have quit. And according to Bloomberg, the top officials are "Apple's national sales and distribution chief, the head of its commercial channels and mid-market business, and the head of telecom carrier sales." Notably, the company is re-structuring its sales team as the tech giant looks to place a new strategy in place.
The new strategy
Online sales partners will no longer offer discounts on iPhones
As part of the new strategy, Apple's online sales partner will no longer offer discounts on iPhones. The move comes after Apple's offline trade partners were left disgruntled following poor response from buyers, given e-commerce giants were offering better prices. Moreover, Apple has detached itself from three of its national distributors with only Ingram Micro and Redington to remain its India partners.
Future
But, Apple CEO is banking on Indian millennials
While sluggish iPhones sales are due to the price tag, Apple enjoys a market share of about 2% in India. Apple CEO, Tim Cook believes young Indians, "moving up into the middle class over time" would increasingly look to upgrade. Speaking to investors, Cook said that Apple had "set a new first-half sales record" and it will continue "to put great energy" in India.