Apple has lost to Android in India, and it is not entirely Apple’s fault
It has been all over the news that Android dominates the Indian smartphone market with 97% of the share. This is a good news for Google, since Sundar Pichai has been working really hard to push its affordable range Android One devices in India. But this is definitely some bad news for Apple, who has also been working really hard to grow in the Indian market. As BusinessWire states, Apple shipped only 800,000 smartphones in the second quarter of 2016, which is a downgrade from 1.2 million units sold during the same quarter last year.
What might be the reason for Apple’s failure in India?
The most common answer you will hear to this question is ‘not many people in India can afford iPhones.’ This is somewhat true. The Verge has an amazing piece related to this. It gets a lot of things right, including Apple’s inability to provide cost efficient option to smartphone users in India. This is in part true due to the Indian government’s ban on selling refurbished devices, which would otherwise allow selling of iPhone at a somewhat lower price point. Moreover, Indian carriers do not sell subsidized phones like the U.S., making it further difficult for them to buy a premium devices such as iPhones or Samsung’s Galaxy S and Note series. The only option left is to buy the device at a full up-front payment.
Except that is not the only option. The Verge fails to mention that there are monthly payment options by the local resellers. If you want to buy an iPhone in India, it is more expensive than the U.S. But there are many financing options available by the shopping malls and other resellers that sell the device. For instance, store like Chroma in India do have a 24-month payment plan with 0 percent interest rate. And that is how many people even in the U.S. are buying their devices, especially with carriers like T-Mobile moving away from contracts. Considering a 24-month payment plan in India, the customer would have to pay about Rs. 2400 per month for a 64GB iPhone 6s, which is roughly about $36. Many people in India do have that much financial ability to pay Rs. 2400 per month now that India’s living standards have drastically improved over past few years. So it is safe to say that affordability is not the only issue.
Then why are Apple’s sales dropping in India?
It’s quite simple actually – mindset. In first-world countries, people are used to living their lives in debt. People don’t think twice before using their credit cards. I mean, why bother spending out of your budget when you can eventually pay it off, right? Especially in the U.S., kids are forced to get used to debts with the high amount of student loans they have to take. India works a bit differently. People still are not used to using their credits cards in India. They avoid being in debt at any cost, preferring to pay for their purchases up-front and controlling the flow of their money with a balanced budget. And that is why most of the people in India don’t opt for buying premium devices – they would rather choose a cheap android device that can meet their basic needs of making and receiving phone calls and texts, maybe snap some quick pics and use social media. They don’t need to have the best of the best for that, but anything that gets the work done will suffice. Besides, many people in India believe that Smartphones are not something that they should spend $1000 on. It simply isn’t that worth it. They would rather spend that money on other necessities, or invest the money in business or their kid’s education. That is the Indian mindset. And that is why Apple is failing in India.