) is making a push to gain market share in India. Branching out
into this market is a smart move, but with the economy slowing down
and the rupee losing value, there is no guarantee that it will work
, an Indian business paper,
that Apple will finally make a push to get iPhones and iPads into
Indians' hands by opening "stores within stores" in small towns in
the country. To reach a $1 billion revenue goal, the company is
seeking 100 exclusive standalone franchises, mostly in smaller
To give you an idea of how poorly Apple sells in India, just note
) Windows Phone outsells it. Currently,
) Android operating system enjoys
91% of the smartphone market share in India
, according to IDC. Windows Phone takes 5.4% share, and iOS powers
just 2.3% of India's smartphones.
The reason for this is obvious: Apple products aren't cheap,
especially not in rupees. Like China, Indian telcos don't normally
subsidize handsets. If this were the case in the US, it would
seriously stall the growth of the smartphone market. Coughing up
$200 is much easier than parting with upwards of $700, even for a
premium quality phone.
But for Indians, it's a bit more extreme. Would you give up eight
months of your salary for a phone? The iPhone 5 costs 45,000 rupees
in India, which is pretty close to the estimated current price
per capita income
of Rs 68,747 (ignoring, of course, India's rampant
(OTCMKTS:SSNLF) Galaxy S4 is just a few thousand rupees less. Most
smartphones in India are on the lower end of Rs 7,000 to 12,000.
The long-awaited "cheap" iPhone, the 5C model, is still out of
reach for most Indians, according to
. High import taxes don't help.
Couple that with the rupee's
this summer following the Federal Reserve's taper announcement, and
it's pretty hard for even wealthy Indians to afford a top-shelf
After the rupee went from 53 against the dollar to 68, Samsung, the
current market share leader, increased prices in India, but Apple
let its margins erode
to gain a slight price edge on its rival. It also introduced
financing options and discounts to lure customers. In addition, it
is hoping to sell more of the older iPhone models such as the
fourth generation, which aren't selling much in the more developed
markets such as the US.
Currently, the top 10 cities account for 90% of Apple's India
revenue, though there isn't a single official store in the country.
Its revenue jumped 223% in India during the 2011-2012 fiscal year.
While a concerted push to place Apple stores in shopping areas
around India could help make the phones available, Apple products
will likely remain a niche luxury status symbol.
Another reason to be skeptical of Apple's potential in India is the
alarming slowdown of its economy. In the latest quarter with data
available, India grew at a 4.4% annual rate between April and June.
While the US, Europe, and Japan would be ecstatic about such a
growth rate, that's the slowest that India has grown in four years.
and weakened currency could dash consumer confidence -- and Apple's
hopes in the world's second-largest country.