APPLE GROWS IN INDIA AS GLOBAL SALES WEAKEN

Likely to sell 3.5 mn devices here this year, a sequel to strategy change for widening retail reach and offerings

In early August, weeks before Apple’s yearly flagship launches, Global Chief Executive Tim Cook reiterated his optimism about the information technology (IT) multinational’s future in India. He presented a glimpse of Apple’s plan for the market and efforts taken by it that had already translated into results.

While the India story was not unfounded, Apple’s market share by end-September in the global smartphones market dipped below 12 per cent, more than 10 percentage points behind rival Samsung. Data from US research and advisory firm Gartner show from 17.9 per cent in the December quarter of 2016, its share steadily went down to 11.9 per cent during July-September. It had the top spot last year, marginally higher than Samsung at 17.8 per cent; now, its sales are 88 per cent lower.

The trend in India, however, is a contrast. After growing its volume sales by over 30 per cent last year to 2.5 million units, Apple seems likely to beat its own feat. Counterpoint Research says iPhone sales are expected to cross 3.5 mn units in 2017, about 40 per cent higher over 2016. While its global share is headed downwards, Apple managed to take 2.2 per cent of the overall smartphones market in India during the September quarter. Not only higher than most previous quarters but given the fact that the quarter saw 40 mn units shipped, analysts say it reflects Apple’s growing influence in India.

Global seasonality, say experts, might have played a role in Apple’s lower sales during the recent quarter. In India, stockpiling ahead of the festive season might have been a reason for such high import of iPhones. However, there is more. What lies behind the curtain is a change in Apple’s approach to the local market.

Sources say since Cook’s first India visit in May 2016, his company's focus has shifted from selling its latest flagships to driving of volumes by offering its entire portfolio. Of late, not only has Apple increased its retail reach and visibility but has focused on the e-commerce channel to push older yet popular models like the iPhone 5 and 6 series.

According to Tarun Pathak, associate director at Counterpoint Research, it has sold a record number of these models through e-commerce sites. “The online channel accounts now for close to half of iPhone sales and proven crucial for Apple’s rise,” he said. While pushing its latest flagship models has always been a priority for Apple, the change in strategy is not without rationale. According to experts, apart from driving volumes, it serves another purpose. Being run on a closed operating system that at is part of a larger eco-system of devices, consumers opting for older iPhone models eventually turn to newer ones and other Apple devices.

After sales of the iPhone 8 series and the iPhone X failed to impress analysts, Apple’s trade partners here quickly came up with discount and other promotional offers. By the end of November, Amazon in India was offering a ~3,000plus discount on the new iPhone 8 models. For the iPhone SE and iPhone 7, the discounts were higher.