Does India Exist for Apple?

on March 5, 2014
Reading Time: 4 minutes

India is considered to be the next big superpower and second largest market for smartphones. It is a country Apple often ignores in their giant plans to get iOS to concur the smart phone world. Sure, bureaucratic hurdles do exist, and Tim Cook has pointed those out on prior earning calls, but while every other tech giant has managed to clear them, what prevents Apple?

India is one of the world’s largest and most price conscious mobile markets. India is home to a burgeoning middle class that consists of young urban youth who are looking to buy the latest smart phones and be one amongst their peers internationally. Apple, however, doesn’t seem to see India this way. Why do I say this? Read on.

In the last two years, Apple has witnessed strong demand for its iPhones in India. Incentivized by the fact that Apple teamed up with local financial institutions and large retail chains to sell iPhones on interest-free loans and even at a slight discount to students. While this did seem like a signal that Apple was serious about entering the Indian market, their overall stance has been rather bearish.

Retail and Pricing

Apple, in India, has decided to stay away from directly entering the market to retail its products. They instead, choose distributors, who sell them at a rather high margin. This has led to poor positioning of the Apple brand in Indian retail stores, and so called Apple Premium Resellers. Few salesmen know much about the iPhone’s cool features. Many prospective buyers leave the store ending up buying either an Android or Windows mobile device. Consumers are left considering it “a more value for money proposition” simply on hardware specs.

Who wouldn’t fall for a salesman claiming a 13 Mega pixel camera (albeit with a poor lens) and a quad core processor (albeit with a slower processing speed) is better than the superior iPhone? As Benedict Evan’s rightly points out, “They don’t go into the shop and ask how new the chipset is – they look at the phone itself as a buying proposition.”

India is one of the most expensive places to purchase an iPhone. The iPhone 5s is sold at a whopping ₹53,500 or $873 for the 16GB unlocked model, while the iPhone 5c is sold at ₹42,500 or nearly $688.

The iPhone 4s is sold in a similar price band as Google’s latest Nexus 5. Think about it, a phone with technology that is nearly 2 years old is being sold for the same price as that of what many consider a top end Android device.

This has also led to many preferring to purchase their iPhones either abroad or to ask a cousin/friend traveling abroad to bring them one back. Apple, to prevent this, doesn’t service iPhones purchased in a country other than India (more on this below).

Service

Apple has outsourced the servicing and warranty fulfillment of Apple devices in India to registered third party companies referred to as Apple authorized service providers (ASP). These ASPs refuse to repair or replace an iPhone purchased outside India. Not to service your own product, only because it was purchased in a different country, is quite frankly ridiculous. Especially for mobile devices meant to be carried around. After paying nearly a $200 premium on buying that iPhone 5s in India, the service isn’t up to Apple’s famous service levels experienced internationally either. It takes a minimum of 3 days for any Apple device to be serviced/replaced.

In the US, like in most international markets that Apple services, it should be a quick process to get a new device. I was recently at the Apple store in Hong Kong, and it took me under 10 minutes to get a replacement pair of Apple EarPods.

One service technician mentioned to me that, for every replacement or repair job, the ASP requires a clearance from an Apple employee who is based either out of Singapore or the US. Often, parts are specially flown in from Singapore in order to repair Macs. Incredible isn’t it?

App Ecosystem

The App Store is a joke in India. Most apps sold in other countries aren’t available on the Indian store. Instead, the app store in India is riddled with fart apps and other junk.

Until very recently, users were also unable to purchase music and other media content from the iTunes store. Even today much of the content is still inaccessible to Indians. iTunes Radio is a feature that Indian users won’t be laying their hands on for another few years. And to talk about Apple Maps in India would be a rather cruel joke. Apple’s Maps feature set in India is rudimentary at best. Much of the data is erroneous. Cities have satellite imagery that is a good 5 to 7 years old. Transit information is simply unavailable. While Google has made large strides to provide not just transit information, but also traffic conditions, restaurant information/reviews, and more on their Maps app.

Does Apple Have a Future in India?

In a market that is said to be growing at about 15% a year, the fact that Apple seems to look at selling their iPhone in India as an after thought is just ridiculous. India is thus, not surprisingly, one of the few destinations internationally. A place where Samsung has overwhelmingly captured the higher end of the market with their Galaxy range of devices. Nexus sales are booming. According to Google’s own trends service, the interest for the Nexus 5 was the highest from India in recent months.

By treating India as a stepchild, Apple may fast lose a rather large and promising market. One that could boost lagging sales of the iPhone, shore up the Apple stock, and most importantly bring in a huge loyal customer base for the iOS ecosystem.

Meanwhile, Xiaomi has already expressed interest in the Indian market while Micromax continues to grow.

Is someone at Apple listening?