In 2016, Apple CEO Tim Cook visited India’s two major cities – Mumbai and Hyderabad to work on plans to improve the local sales and also to set up an Apple Maps R&D centre. However, since then there has been no improvement in the sales of Apple products in India. At present, Apple has a meagre 2% market share in the world’s second most populous country.
The problem lies in Apple’s pricing of its products in the country. There’s no doubt that Apple is a premium brand which charges higher compared to other companies for the quality it has to offer. However, most of its products are priced exorbitantly compared to the US and other countries because of heavy import duty and taxes.
The Indian government has asked companies like Apple to set-up local manufacturing or assembly plants to skip paying heavy taxes and in-turn improve sales. Apple has indeed set-up a local assembly plant in the tech city of India – Bengaluru which is used to assemble older generation iPhone models like the iPhone 6S and the iPhone X.
Local assembly could help
In the past, Apple used the Bengaluru plant to assemble the cheaper iPhone models like the iPhone SE, to drive sales with decent amount of success. If Apple could start manufacturing its latest products like the iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max along with older generation models like the iPhone XR and the iPhone 8, it could see huge success.
The local assembly will allow Apple to sell products at the same price it sells its products in the US. However, the falling value of the rupee has also been one of the bigger reasons for the increase in the price of Apple products. Nonetheless, the people of India would be happy to have seen products sell at the same price as in the US.
One other reason for Apple’s low sales in India is the reason that the average selling price of phones in the country is $200. Whereas Apple’s iPhones are priced way too exorbitantly i.e $700 and $1000. Apple’s strategy of keeping the older generation iPhone priced low has definitely helped the company push sales. If Apple could release low-cost iPhones similar to the iPhone SE,it could see tremendous success. Would it overtake Samsung and other brands? Definitely no but it would be able to at-least have a quarter of the market share which would still be a big win.
