Apple in India and Porsche vs. Toyota

We recently conducted an Indian market study in several of the more developed cities with a range of ages and consumer types. I crafted this study with a couple of goals: a deeper understanding of some of the nuances in the smartphone market in India and a better understanding of how Apple and the iPhone are perceived in India. My hopes with the second goal was to gauge what the opportunity for India truly is for Apple. While I won’t divulge the entire study, I want to share a couple of points I found enlightening.

First, even though Apple’s installed base in India is relatively small, the iPhone is the second most owned brand behind Samsung and slightly ahead of Micromax. The massive number of smartphone brands sold in India plays into this dynamic. Second, the iPhone tends to have greater business/professional penetration than consumer penetration. More people who said they have a job in upper eschalons of business said they own an iPhone than any other cohort. Understanding that Apple has a strong brand and brand perception in India is key. Several other surveys I’ve seen on smartphone brand and purchase consideration in India have ranked the iPhone quite high. Our own internal study confirmed this. We took it one step further as we explored some deeper sentiment around Apple and the iPhone and asked consumers which brand they believed was the global smartphone leader as defined by things like brand reputation, product quality, design, etc. Overwhelmingly (61%), Indian consumers said, in their opinion, Apple and the iPhone was the leader.

Similarly, when we asked which brand Indian consumers would make their top preference to own, 66% said an iPhone. However, when faced with actually purchasing an iPhone, most India consumers choose a different brand that is a better fit for their budget. After doing some digging, I feel the best way to articulate what is happening is to use a car analogy. The iPhone is to Indian consumers what a Porsche is to me. I love Porsches and think they are iconic and amazing cars in every way. I’d love to own one. Will I buy one with my own money? No. I can appreciate the Porsche or a Ferrari or any number of luxury cars many of us agree are fantastic but they are simply out of the range I’m willing to pay for a car. This is how I believe Indian consumers view the iPhone.

This is where the contrast between Indian consumers and Chinese consumers stands out. Chinese consumers view the iPhone the same way as Indian consumers, only they are willing to go to extreme lengths saving and doing anything they can to buy the iPhone due to its high status. Indian consumers are much more pragmatic and do not strive for status as the Chinese do. Similarly in the US, with iPhones being subsidized (at least initially and now with very affordable payment plans), the US consumer does not have the same sense that the iPhone is out of reach financially as it is in India.

Apple’s bet is, over time, Indian consumers will rise in affluence as India continues to develop and rise in GDP. As their disposable income rises, the iPhone may seem less out of reach and, hopefully, their brand reputation, design, and all the other things that led Indian consumers to believe they are the leader will still hold true and more of them will choose the iPhone. Of course, we can wonder if they will be too entrenched in Google’s ecosystem by then or if it takes so long that, by the time the Indian market is truly ready for Apple, we may be on to the next thing beyond the iPhone.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

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