Apple in India: a lost opportunity?

99 Comments

J.J. Valaya is one of India’s preeminent couturiers and is a self-confessed arbitrator and curator of good taste. I know that for a fact because I have known him from the time when he was a student at India’s National Institute of Fashion Technology. If you enter his store, you can see that tasteful elegance on full display. And he also likes gadgets — a lot of them. He walks around with a Samsung Note and a Blackberry Bold(s BBRY).

His Bold is on its last breath so he asked me: what should I buy? Well, since he and I have a similar taste palette, I recommended iPhone 5.(s AAPL) But that didn’t impress him — he said, well, it didn’t feel that different than iPhone 4S. When I asked him if he had spent time on it, he answered in the negative.

And that’s when it hit me — the reason he can’t be convinced was because he had not been able to experience what is quintessentially Apple and what converts a regular person into an Apple customer: the immersive Apple Store experience.

Many phones for many folks

To understand the Indian mobile phone market  — about 900 million total connections — one has to understand that it is literally different strokes for different folks. The low end, budget and medium end of the Android-based(s GOOG) smartphone market is being swept by local brands such as MicroMax, whose Canvas devices are red hot. And there are the no-brand Chinese handsets gunning for that low end. Add two Chinese biggies, ZTE and Huawei, to the mix and you have a lively smartphone marketplace. Sure there is Nokia(s NOK) and Blackberry and Sony,(s SNE) but it is hard to tell if they are doing well or not.

Apple Store in Shanghai

Apple Store in Shanghai

However, when it comes to the top end of the market, it is Samsung all the way. Sure, there is Apple, but frankly it is a distant second. In November 2012, Apple launched the iPhone 5 in India and in the three months ending Dec. 31, 2012, the Cupertino, Calif.-company sold a mere 252,000 iPhones in that country. The data prompted everyone from the Wall Street Journal to Reuters to claim that Apple was doing well in India, but is it really doing well?

Canalys press release 160113 - tableIf you ask me, the answer is no and frankly they could be doing better. Yes, compared to China, India’s smartphone market is puny: According to Canalys data, there will be about 26.5 million subscribers in 2013 (though I get a feeling they are underestimating the potential and demand). But it will grow bigger, and it will grow fast. IDC says the market will be 108 million units in 2016 versus total smartphone sales of 19 million in 2012. In other words, it is a big enough opportunity for Cupertino to wake up and smell the curry.

Samsung side up

I walked around stores in and around Delhi about a week ago, which is where my parents live. And even as a casual observer, it was clear that in India, Apple’s place in the market had been reduced to just another handset. The Samsung Galaxy branding was in your face — from television to in-store displays to the newspapers. The Korean giant was basically everywhere. I had walked into many stores where iPhones and iPads were on display, except they were lost in a confusing array of other phones. (In September 2012 the company partnered with local distributors like Ingram Micro and Redington to get to retailers in smaller towns.)

People want a lot of features on stuff they buy — more buttons, bigger screens, more memory — more is just better, in some parts of the world. And that is why larger phones and hideous phablets are so much in demand. That plus incessant advertising by Samsung has turned the (attention and thus the) conversation away from everyone else, Apple included. Samsung sold 40 percent of the 5.2 million smartphones sold in India in the three months ending December 2012.

Ignorance is not bliss

I am just baffled that a company that would insist that Best Buy(s BBY) and Target(s TGT) create an in-store experience that has some resemblance to the Apple Store outsource its sales to carriers and third parties, who sell phones like a street cart vendor sells vegetables and fast food. My eyes bleed every time I have to enter one of those carrier stores in India. They are the antithesis of the Apple brand.

I am frankly amazed that Apple has left the second-largest mobile market — India, that is — to its own devices. I don’t understand why. It is not that there is a lack of people with money. There are probably more potential customers of iPhones and iPads in India than in say Germany, the U.K. or in the Netherlands. They all have multiple Apple stores, so why not India? When someone asked him last year about company’s strategy in BRIC countries, Apple CEO Tim Cook said that of all the countries, it is likely to go after Brazil after China instead of India and Russia.

And maybe it is time for Apple to go back to the drawing board and come up with a new plan. One that involves opening a handful of Apple’s own stores in India — say in Delhi, Bombay and Bangalore. There are relatively few stumbling blocks. Last year India allowed 100 percent foreign ownership in the single-brand retail segment, which is great for a company that sells its own brand of goods. Apple does just that.

Rachel Lashford, managing director for mobile at Canalys, told the Wall Street Journal, “Until Apple is able to reach lower price points, it will continue to be overtaken by competitors in India.” I couldn’t disagree with her more.

Go ahead be elitist

I admit, that I normally spend most of my time in India in big cities — Delhi and Bombay — but I can tell from the wall-to-wall advertising and all the talk, Indians love their mobile phones as much as their cars. For a certain class of people — the upwardly mobile and the real estate rich — their phones are often a badge of success, much like the cars they drive. For these folks it is either the very best or nothing.

Apple simply has to stop thinking that it can sell cheaper iPhone 4 and iPhone 4S models to Indian consumers. Just like Chinese buyers, Indian buyers are very “badge” conscious and want to get the latest and the greatest. It is time for Tim Cook & Co. to embrace their internal elitist and go for the premium positioning of the brand.

And it all starts with an Apple Store. As far as I am concerned, an Apple Store is the gateway drug to the all-Apple experience. It is where you touch, feel and fall in love with Apple products. The interaction with iPhone and iPad and just the complete retail experience makes you either one of the “fruits” or not. It is also perfect place for up-selling different products.

timcook2

Fear of an Android (only) nation

I even found the perfect location for the first Apple Store: the DLF Emporio mall, which is arguably is one of the plushest shopping malls in Delhi. This is where wealthy (and I mean crazy rich even by American standards) go shopping for luxury items from Chopard, Gucci, Roberto Cavalli, Chanel and Louis Vutton. The prices there would induce rapid gulps in any sane person, but on my last visit (which was about 10 days ago) I saw people walking with more shopping bags than one sees in say Rodeo Drive. The whole mall was based on the notion of up-selling.

The same buying dynamics — brands as a badge of one’s success — that work in China, work in India too. Imagine if there was an Apple Store right in middle of this opulent (and over the top) building — the iPhones will fly, and so will iPads and Macs. Apple’s brand has a level of luxe associated with it and I think Apple would become the ultimate badge phone.

Otherwise, Apple will continue to lose mind share to the likes of Samsung, which has done a good job of branding itself for the “status symbol” end of the market.  Cook is a pragmatist and I am sure he realizes that it is important to play to win in India. If he doesn’t, then India becomes an Android Nation — it already is, to some extent. For folks like Valaya who should be ideal Apple customers, there is no reason to think about them.

99 Comments

Marc

Emporio mall would be the right place Om….. Apple needs space to create an iconic store… 10,000-15,000 sq feet ….. You won’t get that space at Emporio!

Apple can be an standalone store anywhere in Delhi…. “Build it and they will come”….. N I know the perfect place for it :)

Marc

FYI….. I’ve been using apple products since the Newton! N I’m writing this on my iPhone 5 after using android for 4 years!

bhatnaturally

Great article, Om. I agree that Apple has failed to provide the ‘experience’ of an iPhone 5 to a large number of people here. I wrote about it here: http://www.bhatnaturally.com/apple/iphone-5-india-launch-the-experience/. But that’s possibly changing with a slew of EMI options made available on the iPhone 5 & advertised heavily. Overall, I am not too sure if India is ready to be equated with China in terms of potential. China delivered $6.83 billion in revenue for Apple in Q1’13. India is largely a value conscious market with negligible Apple ‘halo’.

Amrita Mathur

There are EMIs being offered on iPhones in India?! Geez, then Indians will soon turn into Americans as well – living off their credit cards.

Although my bet is that the majority of Indian is still ‘old school’ (in a good way) — they buy things if they have the cash in the bank. Whether that be a $700 phone or a $700,000 home.

dreyfus2

Well, I have been working and living in Mumbai for the last two years and think there are some relevant points to be made… (I hope):

– Even the well-earning Indian people (I’ve met, and some of them were filthy rich, I mean the kind of family of three occupying a 12-level building right at the beach alone kind of rich) are extremely price-sensitive. Thanks to ridiculous import taxes, people bring in a lot of stuff from abroad. Apple (without moving some production to India) would have little chances to offer better pricing.
– When going to places were a lot of rich young Indian people hang out, like the Four Seasons roof top bar, or the weekend disco at the Juhu JW Marriot, you did almost only see iPhones and iPads, eventually a Galaxy, but certainly none of the local brands. I assume Apple’s saturation among the wealthy is a lot bigger than what local sales would suggest.
– When going to (expensive for most locals) coffee shops (like Gloria Jean’s, Lavazza, Barista, Coffee Day, etc.), at least 80% of the laptops “on display” were Apple’s. Again, I think the saturation is a lot higher than local sales indicate.
– The requirements to partner with local strawmen to do business in India has inhibited Apple stores and even an online store so far. I do not see Apple making a move before that changes.
– Some of Apple’s resellers (like Maple, iStore and imagine) are quite good, reliable and knowledgeable – there is little an Apple operated store could do better. As long as you avoid shabby and clueless outfits like Croma and Unicorn, you can find pretty good service in India. I have pre-ordered the iPad 3 and the, then new, 15″ Retina MacBook Pro while in India, and both things arrived exactly on their respective launch days, complete with a local “genius” who did the initial setup, transferred data from my old computer, etc. I have nothing to complain about.
– Some very nice local shops are already in premium locations (like the iStore in the Palladium Mall, or the Imagine store at Inorbit Mall, and they are definitely busy). An own Apple store would simply kill these business and replace them with, mostly, the same.
– The local telcos are not doing a bad job. I bought my iPhone 4S through a pre-order on Airtel’s website and received it exactly on launch day. Unfortunately it had a manufacturing error (home button dead). One phone call to them and they replaced the unit next day. Can’t complain about that either. I don’t think Apple could do much better than that.

Rishi Shankardass

Good points. I think the main reason however and something I believe either Jobs or Cook hinted to in an interview (can’t remember which one) is that business in Russia and India is not up to Apples standard. I think China and Brazil have gone to great lengths to remove any obsticles in a foreign multinationals path. Whereas Russia and India have very deep systemic issues (namely corruption) with the way thier policies are approved and created and are not conducive to business. I believe Apple is just taking a moral stand on this issue where many other companies have caved and started playing by India’s/Russia’s rules.

Amrita Mathur

Not sure it is a moral stand per se. I think Apple just hates not being able to call the shots…

Ankit

Here’s where I don’t agree with you. Yes, Apple caters to people of taste and has a premium standing. And in India many really affluent people have no problem buying the phone. But. Apple’s stance almost everywhere it is really successful has been ‘affordable luxury’, not exorbitant luxury like Chanel, Burberry, Armani or others in Emporio. If it was, Apple wouldn’t be doing the numbers it does. And so I don’t agree that Emporio, much as I love that mall, will be the best place for an Apple store.

Many people who would really like to buy the iPhone can’t coz it is just too damn expensive for a phone. So, in an ironic way though, Apple’s stance, unwittingly, in India is like the premium brands in Emporio, but that’s not what Apple should look to keep.

I did not upgrade from my iPhone 4. Part of the reason was that there wasn’t really anything that compelled me to the 5, but the price totally put me off from even considering it. I own a MBPr and an iPad 3 so it’s not that I can’t spend the money, I just find it ridiculous to spend that much on something that can be lost or damaged as easily as a phone. I know I’m not alone in this point of view.

My younger brother who is studying in the UK now wanted a new phone but did not think of getting the iPhone 5 here because of the price. Within a week of landing in the UK however he bought one, coz of the carrier subsidy.

Most of the high end Samsungs that sell are a good 10k cheaper than the lowest cost new iPhone. And they drop in price every few months, which the iPhone does only once a year.

The iPad is priced really well and I see that everywhere now. In colleges, at friends’ and relatives’, in malls etc.

Also, did you have a chance to visit any of Apple’s premium resellers’ stores like Imagine, iStore by Reliance, Maple etc.? They are ofcourse nowhere near ambitious as Apple stores and don’t carry with them the face of the brand, the culture and the appropriate message but they are still pretty damn good as far as stores go.

Samsung’s marketing does play a huge part for people like J J to not buy the iPhone but for the iPhone to be really popular like it is elsewhere, it has to be priced right.

Kamalesh

Good insights, Om.

My sense is that Cook wants to focus on Rio & Sao Paulo, initially, given the upcoming World Cup & Olympics there, in 2014 & ’16. Good way to enjoy a multiplier effect with global events, tourism, etc…

It should also be pointed out that Ron Johnson’s departure to JCP and the Browett fiasco could only have hindered Apple’s retail plans. I think it really hurt, actually.

While I’ve had similar conversations with family in India & Brasil about switching to Apple devices, you’re right that walking into Apple Stores (& getting Genius advice) changes everything, and once they own & experience their first device, it’s a revelation. (And issues like side-loading give way to awareness about Dropbox & iCloud and other elegant options.)

Yes, prices are higher given currency exchange & import tax, but there’s enough people with a huge amount of disposable income in all BRICS areas…but note that value (& resale) is quite high with Apple devices, as well.

Jay

It’s not just Apple ignoring India, it’s also about Indians not accepting iPhone. A few years ago people didn’t know why they needed iPhone, for lack of awareness, now they don’t know why they need iPhone because they have Android. If you think mega rich and brand conscious exist only in metros, then you really don’t know India. My hometown is a suburban Industrial city that is a biggest market for Mercedes outside any metro area. You sit outside a cafe and watch all the latest models of cars zoom by any time of the day. International travel was a status symbol even before IT explosion. After coming to USA it was hard for me to accept the fact that many Americans struggle to make their car and home payments.

N

I think there are two reasons, one which may not be addressed here and the other I agree with Om. For one reason, everything about AAPL is closed, I mean, the iOS, App qualification etc as contrast to Android. It is is not that a common man would differentiate but I think that is the mind-set and secondly, the brand, Indians tend to look for house-hold
brand, like I mean, Samsung is a brand in India not only know for Phones but pretty much
for other electronics too, like TV and refregirators. An Indian household which owns an
electronic item is more inclined to buy another electronic item from the same brand, I feel
Apple has lost it totally in this aspect.

Amrita Mathur

Agree N. Indians tend to buy what they are already familiar with and/or based on strong recommendations (vs. a great experience). Needless to say, it doesn’t matter how amazing Apple’s iphones are — until they reach a certain tipping point at which time they are ‘proven’, they will not win against the Samsungs and Nokias of the world.

Nitin Alabur

One thing that stands out very clearly, is the lack of Apple Stores in India.

“iDevices get lost in a confusing array of phones in a multibrand dealer shop”, is the very reason why Apple Stores around the world make so much difference to Apple’s sales, revenues and profits.

Is Apple being ignorant by not opening a few Apple Stores in India? I am not sure.

The reason (I guess) why Apple hasn’t done this, is the Indian regulations barring 100% FDI in single brand retail.

IMO, Apple would rather lose the market share to Samsung in India, if the India market is not resulting in a comparable (to other markets) profit share.

Aditya Siddharth

a. Indian regulations permit 100% FDI in single-brand retail although it comes with some caveats
b. There are at least two retailers in india which actually have Apple-exclusive formats – Imagine and Reliance Retail’s iStore with a presence in top 10-12 cities and multiple stores in the major 4-5 cities. If Apple was indeed serious about retail as a driver of brand and customer experience, they can easily partner with these players to create it without having to put in a lot of their own investment OR having to figure out regulations.

Tim F.

Kind of disingenuous to claim “2nd largest mobile market” while glossing over the fact that the smartphone market is only at 25 million users.

The Shangai AppleStore probably services that many iPhone users alone. Developing the infrastructure to have AppleStores in Mumbai, Bangalore, and Bomay would be a massive expense just to get a million or so users… Would it help increase that userbase from such a small number to something greater? Sure, but so would another Vancouver (or whatever random city that already has a bigger Apple presence) store.

Om Malik

Tim

That is assuming that it will sell only iPhones and not other iDevices, which is another big opportunity for the company. There is room for a lot of sales here. Even 5 million iPhones at $400 a device, works out to about $2 billion – not something to sneeze at.

Tim F.

No, that’s assuming that in a nation of 1 billion people that only has 25 million smartphone users, there probably is not the development for a substantially larger market for any other devices either when those devices get their power (apps, internet content) from the web. In India you are more likely to get internet access from your phone (again only 25 million users however) or a cafe. Without a data plan, iOS device users are greatly helped by wifi — but I’d bet that wifi numbers are pretty pathetically bad in India as well.

Om Malik

Tim

I will make one simple observation – that 25 million number is still bigger than the population of Netherlands and thus to my argument – that India does merit one or two stores.

Regardless, there is a lot more wired broadband connections today than a few years ago. My parents are using Broadband (WiFi) and iPad (which I bought for them in the US) to do Facetime with their kids and grandkids.

Tim F.

No, actually. A simple potential market size to store ratio comparison between the Netherlands and India does not compute. How do the regulations of foreign-controlled businesses compare? What are the import/export tariffs? What are the requirements for domestic production? How does the stability or corruptibility of the government compare? Risk of terrorism? Past history of users? Infrastructure to support a local workforce? Etc.

spacegorilla

Apple will enter India when they are ready, they have never worried about being first, they focus on being better, and by better I don’t mean specs, I mean a better overall customer experience. Humans don’t care about specs anymore, only a small number of nerds care. But of course those nerds will insist that everyone cares just as much as they do.

Rajkumar

Here is an indicator that I would like Apple to pay attention to — compute the number of Mercs, BMWs, Porsches etc sold in India to the number of iPhones sold; and compare that ratio against similar ratios for the US and the rest of the world.

Marzell

I guess I don’t get it. If the upwardly mobile in India want the best phones, why aren’t they willing to pay for it? Why does Apple have to make a cheap IPhone?
I’d like to get the best for cheap to.

Arjun

Some time late last year, I read a forbes (I think) article that said it had to do with indian regulations that required 30% of parts sourced from India. I don’t know if that is really accurate, but I assume China also has a framework of a law similar to that, but is not a problem because Apple already uses Foxconn.
With respect to prices, I wonder if Apple’s strategy currently is ‘those who can afford will import and buy anyway’ and ‘those who can’t afford Apple prices won’t buy anyway’ irrespective of a physical store or not. Given that India has a _huge_ disparity of income, it may entirely be the case that the upsides to a 30% sourcing law may not be attractive to Apple who are looking to keep their margins very high.

Michael Martin, PMP

Om,

As you probably are aware, India has a lack of 3G connectivity, nevermind 4G/LTE, that makes the premium price and value of an iPhone 5 not worth it…especially without carrier subsidies.

Also you seem trapped in the legacy Apple distortion field of everything it does is best, when its devices and software has been lapped by Android, since you feel ONLY with a “church” by way of an Apple Store is needed to sell its products isolated away from pesky competitor products…since when they are embedded with competition in current Indian shops, they are clearly not the desirable or better devices.

Odd you would describe phablets as hideous but not iTunes…

dreyfus2

Well, 4G is of course pretty much non-existant, but 3G connectivity (in big cities) is actually very good, very cheap (I paid $23 for 5 GB of HSPA+ data per month) and, on average, faster than in the US.

Pretty much everybody I worked with in India wanted an iPhone. They just can’t afford it (the iPhone 5 with 32 GB is around $950, I had several qualified electrical and IT engineers in my project team that did not make that much per month). When I bought my iPhone 4S in India, I posted my iPhone 4 on the internal bulletin board. I had over 400 email inquiries in two hours… Android phones certainly did not get that much interest. So much for “lapped”…

Vijay

Om,
Riddle me this. How many senior execs at apple are of Indian descent?

How does that compare to other mobile or Silicon Valley companies?

Any correlation to their lack of interest in the country?

A S

Om wrote: “I recommended iPhone 5. But that didn’t impress him — he said, well, it didn’t feel that different than iPhone 4S. When I asked him if he had spent time on it, he answered in the negative.”

So, the question is if he spent any time with the iPhone 4S. If the answer is yes, then his reason is perfectly legitimate and understandable. What is so different about the iPhone 5 experience compared to the iPhone 4S experience?

If he is such a “curator of good taste” as Om says he is, then there must be reasons why he bought the Samsung Note, reasons that are beyond just wanting “a lot of features on stuff they buy — more buttons, bigger screens, more memory — more is just better”.

Danox

The Apple ecosystem will sell in India, Russia, Brazil, and other countries in time, Apple control of the mobile, desktop OS’s give it an advantage that over time can’t be beat, the iPad Mini with the app store behind will sell big in the world in general. It’s the Microsoft pc’s of the world that have to worry, a cheap pc or something, that runs first world apps. Apple is like In and Out Burger, they will get there (nationwide/worldwide) in a profitable manner on their terms.

gregorylent

is there any country that can’t do electricity where apple is selling well?

Gadhia Amit

I hope an Indian Apple rises from the ashes of Apple’s lost opportunities.

Aditya Siddharth

Om, wondering if you are missing another element to Android’s popularity. An iTunes kind of content environment is still emerging in India and sideloading of content on to devices (through SD cards or simple drag-and-drop from PCs) are extraordinarily common and popular. Android lends itself very well to this user behavior and consumer need than Apple does, with its extremely restrictive ecosystem. So, just retail presence etc. is not a guarantor of success.

Aditya Siddharth

Having used both and not being a fanboy of either platform, I feel that doing it on Android is way more convenient.

Kindroid

“hideous Phablets”. You need to be reminded that in many developing country a person’s smart phone is their only computer….for a host of reasons. So phablets are the device of choice. Add that to the need for devices to be customizable, and the success of these non-Apple devices are a no brainer. Apple products are fine for a certain segment of the market….but they don’t scale well across entire markets.

Animesh

Not having the choice to do what you really want to do is hideous as well. Having a comfortable screen size to enjoy content without having to pay every time to a forced choice is freedom.

I can see you love Apple, but having an Android phone with a ‘non-apple-standard’ screen size doesn’t make it any worse.

Why should Indians pay hideous Apple tax to enjoy their phones?

Tarun

They may be. Even I thought Phablets were ‘dead on arrival’ when Samsung launched the Galaxy Note I. However, you’ve got to give it Samsung that they have created a new ‘Phablet’ segment and generated a good deal of interest as well as sales for these devices.

Sumit

– Apple phones are overpriced and under-featured as compared to other phones worldwide. In India the phones that are at competitive prices are 3 year old models. People here are not that dumb. (iPhone 5 costs 50K INR).
– Plus there is little carrier subsidy here so no one to push it for cheap.
– Apple doesn’t have a ‘cult’ following here either.
– iTunes just came to India, still not sure if apps accept Indian Credit Cards.

Apple is too snobbish to come to India for it’s own detriment, but hey, the consumers here have choices and are happy with it. Whatever Android leaves Nokia can pick up (only if Nokia had the brains to time itself correctly… blunder of not releasing 920 over Diwali)

Srinidhi Rao

Sumit, agree with your comments.. Apple devices are too overpriced in India and lags quite a bit when it comes to new device release. With this attitude, there is no way one can avoid Samsung taking over the market..

Even though, I am an Apple fanboy, it is unfortunate that Apple does not focus on India (yet)..

just

– iPhone 5 16GB is 45,500. Look out for retailers giving further discounts of up to Rs 1500

– I don’t know about cult status and all but most of the customers here will buy an iPhone if it was affordable.

– You could always buy apps from iTunes in India using your Indian credit card like any other international transaction you would do in an e-commerce website. Two months before iTunes enabled to buy in Indian currency as well. Does the new change still support Indian credit cards ? Yes. Source ? Myself who has been purchasing stuff.

Amrita Mathur

I don’t agree with you Om on ‘badge consciousness’. I think India has an upper (economic) class, but an even bigger middle class, where productivity and affordability come first.

Also, the buying decision for the average Indian isn’t the same as it is in North America. I am not sure that an immersive Apple store experience will alone do it. India is a highly recommendations and needs based economy, vs. find the best product or best value type of economy. Things like price certainly are a factor, but not in the way North Americans think.

Amrita Mathur

Look like the last half of my comment for cut off:

So, in short. Yes, lost opportunity for Apple. However understandably, India may not their focus at this time simply due to the cultural hurdle they have to overcome. For example:
1) The constant mental justification by a buyer/ prospective buyer (sometimes over-justification) of why one chooses any phone – whether Nokia, Samsung or anything else.
2) Also, things like experience, design and an ecosystem have less tangible meaning in India, and another reason why the Apple store experience, immersive as it may be, will alone not help Apple win. Tangible components such as features tend to rule today.

And frankly, the Indian govt doesn’t make it easy for multi-nationals to set up shop there either.

Ravneet Grewal

I agree. All my friends in India are more leaning towards Samsung. Desi problem of ‘more features!’

But yeah, Apple could have created a more exclusive brand by keeping the prices stiff high and open exclusive stores in locations like you mentioned, where money would have just flowed. Heck yeah a color just for India, exclusively available in one of those malls, its a guaranteed money maker!

A S

I suppose the same ‘desi problem’ exists in the rest of the world, including the US, where more people are leaning towards Samsung. If that is true, then it’s not a ‘desi problem’, it’s a worldwide problem. Not a problem, a worldwide preference.

A S

The previous comment I was replying to mentioned that Samsung is popular in India because of the “desi problem of ‘more features!’ “. I was just pointing out that Samsung is popular the world over. Not just in India. So, it’s not really a ‘desi problem’ as the previous comment claimed.

Jay

If you’re referring to volume, then yes Samsung sells more units. They have always sold more units. However, data last Q showed that the number one selling smartphone worldwide was the iPhone 5 and the number two was the iPhone 4S.

Last Q incidentally Apple had higher revenue than Samsung overall although Apple has a much smaller product line and 2x the profit.

Samsung spends around 3x more than Apple on advertising and that’s probably where this false perception that Samsung is outselling Apple is coming from. I believe last Q was the first time Apple actually had higher revenue than Samsung and the gap in profits in actual $ terms between the two also was the highest.

So, no Apple sells more than Samsung worldwide if you’re talking about competing products and overall company performance as well.

As for India, it’s a hobby for any premium brand that exists. There is a small elite that has substantial purchasing power. Most people buy Chinese knock offs and pirate content. Neither iTunes not Apple can make it in India as it stands today. They need to have really low priced products to sell to the mass. It’s a much smaller market for premium products than either Brazil or China.

Gemma

“more people are leaning towards Samsung” – A S please provide (relevant; fresh) data (in this fast moving market), last I heard (for last quarter, world wide!!!) Samsung G III, was third!!! popular smartphone, with iPhone 4s 2nd!!! and iPhone 5 firs, as measured by sales; google it.

Durjoy (Ace) Bhattacharjya

Great article Om- and I think you’re on the right track regarding taste: it might just be that the Indian market responds well to “provable stats” (ghz, RAM, screen size). Which as the “phablets”(had to look it up) take to the logical extreme.

As you point out, there is a conspicuous consumption component to the high end mobile phone market– and you just don’t get any credit for a new phone that looks remarkably like an older model. So I’m not sure duplicating the sleek Apple retail experience is really the answer- it might be too boring for the India market. Think Big Bazaar and their approach to big box retail.

I think that they have to do the equivalent to what Toyota Prius did in the US market. Go to Hollywood / Bollywood, get absurdly attractive people to be photographed using the phone and make it cooler than Android. Don’t discount the price and limit the number that India will be “allocated”. ;)

Om Malik

I disagree mostly because I think the one brand experience is the key. I went into the Tom Ford store and well, let’s just say, it was reinforced that sometimes “brands” just are too powerful and overcome market realities. (In case of Tom Ford, it was overcoming the obvious problem of pot-bellies.)

Vikram

Isn’t the main issue that Apple can’t legally create their own electronics store unless they build/assemble a certain amount of their product in India, which they don’t do?

ishekhar

I totally agree with your Article here Om, but that Shanghai store sketch feels a little irrelevant …

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