Jayanth Kolla, chief analyst at Convergence Catalyst, told TechCrunch, “Unlike most foreign firms that offer their products and services for free in India or at some of the world’s cheapest prices, Apple has focused entirely on a small fraction of the population that can afford to pay big bucks.”
Apple doubles iPhone sales in India during the calendar fourth quarter
With Apple set to report its fiscal 2021 first quarter earnings report tomorrow (check in around 5 pm ET), it looks as though things are off to a good start. According to research firms Counterpoint and CyberMedia (via TechCrunch), Apple delivered over 1.5 million iPhone units in India during the fourth calendar quarter (from October through December). This was a 100% improvement on a year-over-year basis. The increase doubled the iPhone’s market share in the world’s second largest market for smartphones to 4%. Despite its ranking behind only China, India is a developing country where the average person earns an annual salary of $2,000 USD; this means that consumers are looking for value and explains why Xiaomi has been doing so well in the country with its value for money strategy.
Apple saw higher sales in India during the quarter for its 2019 iPhone 11, 2018 iPhone XR, this year’s 5G iPhone 12, and the “more-affordable” iPhone SE (2020). For all of last year, iPhone sales in India rose 60% year-over-year to 3.2 million units. Apple has been beefing up its operation in the country and has started manufacturing newer models in India. It also opened its online Apple Store and is offering AppleCare+ to Indian Apple device buyers. It also used some attractive promotions to jump start iPhone sales with a free pair of AirPods wireless Bluetooth earbuds to those purchasing an iPhone 11. It hopes to open India’s first physical Apple Store later this year.
The iPhone models that Apple makes in India are not impacted price-wise by an import tax. But models that are assembled in other countries have the tax added to the price of the device making the price prohibitive for the average Indian consumer. For example, the starting price of the iPhone 12 Pro Max in the U.S. is $1,099 compared to the equivalent of $1,781 in India. The $249 AirPods Pro is $341 in the country while the AirPods Max cost an Indian consumer $815 compared to the $549 price tag in the states. Surprisingly, some prices have been adjusted downward. For example, Apple Music costs $9.99 per month in the states but is only $1.35 monthly in India. The Apple One bundle including Apple Music, Apple TV+, Apple Arcade and 50GB of iCloud, costs the equivalent of $2.65 a month in India compared to $14.95 monthly in the U.S.