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Apple’s plan to make the iPhone more affordable in India is working

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It turns out giving people money to buy your product — as well as instituting affordable payment plans — works. Apple(s aapl), which has struggled to gain real traction for the iPhone in India, has seen sales of the smartphone rise by 300 to 400 percent in the last few months, according to data gathered by Credit Suisse. The sudden spike in sales for the device — going from about 70,ooo to 80,000 units sold per month to about 400,000 units sold in May — can be correlated to Apple recently offering payment plans and cash back incentives for local buyers.

From India’s Economic Times:

Compared to average monthly sales of 70,000-80,000 smartphones before the EMI [equal monthly installment] schemes were offered to consumers in India iPhone sales have zoomed up to stratospheric levels, analysts at Credit Suisse said. “From our channel checks we believe that iPhone sales are nearing 400,000 units per month in India – that is nearly 3% share of handset sales for a single top-end product in a market that has long been dominated by low-end feature phones,” Credit Suisse’s research analyst Sunil Tirumalai said in a note to clients that was accessed by ET.

Despite this recent surge, Apple’s overall share of phone sales in the country is still extremely low. Samsung devices account for about a third of all handsets sold.

But that’s pretty decent progress in a short time. As iPhone sales in established markets have slowed some, Apple has been fine-tuning its pricing and marketing strategies in emerging countries where smartphone ownership has only recently begun to take hold. As it has in India, Apple has used low- and no-cost payment plans to make older model iPhones more affordable in China as well.

But the cashback incentives seem unique in India, a country where Apple devices are considered expensive. Also significant to the sales challenge: the company doesn’t have the same built-in advantage that it holds in many countries in which it operates — there are no Apple Storesat all in the country of 1.2 billion people.

One way to interpret the success of these moves is that this is a market screaming for a device with the cachet of the iPhone name but with a price tag that Apple doesn’t have to keep artificially low through sales and marketing gimmicks.

10 Responses to “Apple’s plan to make the iPhone more affordable in India is working”

  1. pbajaj

    it is so….so unfortunate that consumers (even the smarter ones) are just missing the point on apple products. its not just about the quality, environment friendly, form/function, design, platofrm/OS, (many breakthroughs which were firsts and emulated by most et al), but the whole experience, the usability, the ease, the functionality (not just feel good factors), moreso the integrity across apple products, which is the focus of apple objective – a common platform across apple devices of whatever category (iphone, iPad/mini/desktop/laptop/tv/router/storage….). and its offerings more than single company (mostly relying on alternate suppliers to mix/match platforms n software). Moreover, with the expected release of IOS7, it will be a brand new and state of the art technology available to even a +2 year old models (starting 4 onwards). and undoubtedly, there are far more offerings and downloads off iTunes/App stores than any other provider combined….. read the facts not market nonsense.. get onto apple website and view the WDC video.

  2. Vikram Gokhale

    This ‘news’ story is what is called as a ‘paid’ item, commonly used by Franchisees to try to get more customers hooked, even though there is very little actual demand.

    The main reason for marginal sales in India is no doubt the exorbitantly high cost ( 1 US $ = Rs.55, which means every iPhone is over-priced by a factor of > 50 ). Androids, on the other hand, are priced correctly, due their wide price-range.

    Another reason is the poor support for Indian users – Siri doesn’t work outside the US, nor does iBooks. In fact, most of the Apps are US-market oriented, which means they are virtually useless for an Indian user.

    • Karthik

      What are you rambling on about? The iPhone isn’t overpriced by a factor of 55 in India. An iPhone that sells for $650 in the USA sells for around ₹45000 (around $810) in India. What makes the iPhone so expensive for Indians is the low per capita income.

      Siri does work outside the USA, although it isn’t as useful given the USA centric programming it has. iBooks does work in India. So does iTunes. Apple actually has their iTunes strategy spot on in India. Each song in the Indian iTunes Store costs around ₹12-15 (around 25 cents) compared to 99 cents each in the USA iTunes Store. They’ve realised the need to compensate for purchasing power parity. It’s just that its easier to discount the ethereal (songs) than to discount stone cold hardware.

  3. Amit Doshi

    I’m surprised by the success these payment schemes are seeing. Why would anyone buy a 2 or 3 year old products(Iphone 4 and 4s) at a price where you can get excellent android and windows phones which are very recent models.

  4. Are these sales figures for real ? I live in Bangalore . I rarely come across people owning Iphone. I have seen 4 or 5 , tops.

    Most of what I see is Samsung. The 5-inch Galaxy models launched has become a hit.

  5. Kaustuv Ghosh.

    I see no reason why there should not be an Apple Store in India. Perhaps a more innovative retail plan where they have smaller sized but prominent retail outlets in Delhi, Bombay and Bangalore to start should help. You want to do well in these large emerging markets, put your boots on the ground.

  6. tfaulk

    “One way to interpret the success of these moves is that this is a market screaming for a device with the cachet of the iPhone name but with a price tag that Apple doesn’t have to keep artificially low through sales and marketing gimmicks.”

    One way to interpret the above statement is that Om was wrong a while ago when he said Apple needed to build AppleStores and majorly beef up its presence in India and you are politely towing his line.

    • Erica Ogg

      That’s not what I’m talking about at all. That paragraph you referenced is a possible argument for a low-cost iPhone; I didn’t make any judgment about Om’s argument regarding Apple Stores in India. But since you’re wondering: I agree with him that having them in India would only help the company’s sales and brand reputation there.