For Apple And Amazon Is India No More A Top Priority?

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The world has to absolutely bear with FAMGA.

The tech unicorns namely Facebook, Apple, Microsoft, Google and Amazon (aka FAMGA) are proving to be the top 5 most dominating tech companies profoundly. These conglomerates are keeping markets and organizations on their toes. The most promising markets and products have been catching their attention. India, however, is apparently a difficult market, particularly, from Apple and Amazon.

Both Apple and Amazon have poured huge investments in the budding market of India and also received significant returns. Amazon India had posted over 105% growth in revenue in its FY 2017, while Apple generated $1.8 billion in revenue from India, with 17% YoY growth for the year ended in March 2017.

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In contrast to the highly satisfying performance, both the companies are found to be paying less attention to India than before. The country is falling short when it comes to notable mentions. The E-commerce major Amazon and the iPhone maker Apple (top player among FAMGA) may have made some serious investments in India, but are considerably talking a lot less about the country.

A New York-based research firm, CBInsights, performed an algorithmic analysis of 40 quarters (2008-2017) of FAMGAs earnings calls transcript. This comprehensive report has an analysis of 1,171,165 words across 10 years of earnings transcripts from Facebook, Apple, Microsoft, Google, and Amazon (FAMGA). It highlights sentiments, product strategy and target markets of these top tech giants.

China saw a significant surge in mentions by Apple. In FY 2017, Apple generated $229.2 billion in total sales. Of that, about $44.8 billion was solely contributed by China. It made “Greater China” an increasingly important market for Apple.

India has been comparatively more talked about by tech moguls Google and Microsoft than Apple and Amazon who mentioned India – Asia’s third-largest economy – less frequently over the last year.

“Apple’s iPhone remains too expensive for most Indian consumers, while Amazon faces tough local competition in the country” – Said CBinsights

Indeed, over the last year, Apple faced hardships in India; Revenue growth fell and it has also been scuffling with Samsung and other Android-based devices.

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Despite these challenges, however, Apple would avoid losing focus in this region.

Apple CEO, Tim Cook said in August last year “We began to produce the iPhone SE there during the quarter…I’m very, very bullish and very, very optimistic about India.”

Etailer Amazon had some different points of hassle. In India’s rapidly growing E-commerce market, the country’s very own online marketplace unicorn Flipkart is a formidable opponent for Amazon.

Softbank-backed Flipkart can be a potential threat to the growth of Amazon in India. Perhaps to wipe out the competition, Flipkart is going the extra mile and has recently achieved some milestones such as raking up higher sales in top E-commerce categories plus it also won the trust of Indian shoppers.

In April 27, 2017 earnings call, Amazon CFO Brian Olsavsky told how company’s strategies differ by region:

So our approach varies by country, and if you look, historically we’ve taken multiple approaches. So in China, we bought an existing business Joyo.com and built off that base. In India, we started from scratch and have built a lot of things ourselves

Yet Amazon has to face the turf war with the local players in the same domain. Also, for Apple, the high-end price of its products is still problematic in India.

While it’s tough to say what made the top executive of the two US-based tech giants avoid India, but their shifting focus on China could possibly be one of the main reasons. Unlike Facebook and Microsoft, both Apple and Amazon are able to break into the walled garden, known as China.For Facebook China is an aliens land as the social networking platform is blocked in the country. The comparatively large number of online shoppers and smartphone users have drawn more attention of Amazon and Apple than India.

At the moment, top heads in Amazon and Apple may be more focused on China, but it would be interesting to find how long India could be ignored, especially when China is heading for saturation soon and India will portray a big window of opportunity due to the low penetration of the internet and smartphone.

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