It looks like the recent visit of Tim Cook to India failed to create much of impact, iPhone sales in India have declined by a whopping 33.34% YoY in Q2 2016, to just 800,000 units, according to the latest report by Strategy Analytics. On the other hand, its arch rival Android recorded a 28.44% YoY growth in smartphone shipments, with 29.8 million units of smartphone shipments figure, in Q2 2016.
The overall Smartphone shipments in India grew by 19%, to 31 million units, in Q2 2016. Apple’s Smartphone OS (iPhone) market share in India stood at a mere 2.4% of the overall Indian smartphone OS market. Down from 4.5% market share in the year-ago quarter, Apple iPhone lost nearly half (47%) of its smartphone OS market share in India in the second quarter of 2016. In contrast, Android dominated the smartphone OS market in India by capturing a record 97.1% market, up by 7.1% point from Q2 2015.
“Android dominates the India smartphone market and looks unbeatable right now, due to its deep portfolio of hardware partners, extensive distribution channels, and a wide range of low-cost apps like Gmail.” – said Neil Mawston, Executive Director at Strategic Analytics
Woody oh, Director at Strategy Analytics emphasises that Apple’s smartphone market share slumped primarily due to high pricing and lack of operator subsidies. He also emphasized on the fact that Apple needs to reduce the price of its iPhones to attract the ideal customers. Woody also said that the company needs to enlarge its retail presence through Apple store or online channels if they want to capture the lucrative Indian smartphone market.
India is a potential market
India is the most promising smartphone market, and almost every smartphone manufacturer is willing to grab a sizable chunk of the market. Amid to the fact that the smartphone penetration in India has still reached to minuscule 17% mark, the adoption of smartphones is slated to grow in the coming years. Gartner has predicted that in 2016, Smartphone shipments in India will grow at 29% compared to the previous year. The rising LTE penetration would enhance the prospects further.
Smartphone vendors have shifted their focus towards Tier- 2 and Tier-3 cities in India especially those who offer entry level and budget smartphones. Smartphones account for a whopping 60% of the total mobile phones shipments in these towns.
iPhone Sales in India: What’s Wrong with Apple
It won’t be a mistake to say that the brand loyalty is zero in India, Smartphone buyers in India prefer price and features over the brand. Besides, in a price sensitive country like India where the Average Selling Price of a smartphone hovers at Rs. 10,700 ($160) Apple has got a tough battle to win as the Average Selling Price of an iPhone peaked at $660 in June 2016 Quarter.
The so called cheaper variant of iPhone, the iPhone SE priced at Rs. 46,500 ($696) is still expensive for potential smartphone buyers. In a bid to push the sales of its iPhone SE, Apple has increased the price of its flagship version of iPhones, the iPhone 6S. The strategy, however, backfired, and iPhone sales in India tumbled down, resulting in half of sale share in Q2 2016 compared to the same quarter last year.
But that’s not all; Indian Government also banned the sales of refurbished iPhones in the country, which has had the positive impact the staggering sales performance of iPhone in Q1 2016. However, the India government believes the older version of iPhone would just pile up the e-waste.
iPhone Sales: Future Doesn’t Look Promising for Apple
The prospects of Apple iPhone doesn’t appear lucrative. Citing missing innovation, some analysts believe the upcoming iPhone from Apple would fail to impress the masses. Rumours are also making rounds about Apple’s plan of ditching any promising feature or innovation in the upcoming iPhone this year, all for the sake of 10th anniversary iPhone due next year.
On the other hand, in Q2 2016, Android dominated the smartphone market in India as major Chinese OEMs like Lenovo, Huawei, OnePlus, LeEco along with many others flooded the market with many smartphone variants.
Apple needs to reform its strategy primarily working on slashing down the price in a bid to boost the sales of iPhone in India and wants to recapture its lost ground. However, Android will be dominating the market in future also, posing as a tough competitor to fight with for iPhone. If not all, Samsung Galaxy S7 variants and the upcoming Note 7 would surely provide stiff competition to iPhone and Apple must find a way to deal with it soon.