For the past number of months, we’ve heard Apple drone on and on about its intention to expand in China, currently the world’s fastest and largest growing smartphone market, and have seen notable efforts by the Cupertino company to up its presence in Brazil, Turkey, and Indonesia. Strangely enough, while all the talk about capturing developing markets is going on, a notable country that seems to be consistently left out of the mix is India. To illustrate: during the earnings conference call for 4Q12, in which Apple CEO Tim Cook made explicit references to Brazil and China, little word had been spilled as to what’s in store for the world’s second most populous country. According to the data compiled by research firm Canalys, last year 19.6 million and 1.4 million iPhones had been shipped to China and Brazil, respectively, whereas for India, total shipments arrived at a mere 460 thousand units.
In a noteworthy article, Gigaom’s Om Malik took note of the above issue and warned against snubbing India’s rapidly emerging smartphone market, which some say has the potential to become the third largest in the world, behind the US and China. To make the case for why Apple needs to significantly bolster its existing marketing efforts in India, Malik has brought to attention a number of interesting observations, as summarized below:
- Like the case with China, more and more Indian consumers are becoming “badge”—or “brand”— conscious; in other words, there is a growing tendency for people there to care about getting the “latest” and “greatest” smartphones.
- The country’s mobile phone market currently has around 900 million connections. While only 26.5 million smartphone shipments are being forecasted for India in 2013, in three years time, that number is expected to grow substantially to 106 million units (IDC).
- Korean giant Samsung right now has the largest, most ubiquitous presence in India, dominating smartphone ads, stores, and smartphone user base. Chinese brands like ZTE and Huwei are implied to be performing decently in the country, whereas local brands like Micromax are popular within the low-to-middle end market. Having sold only around 252 thousand smartphones in India during 4Q12, Apple is currently observed to be a “distant” second behind Samsung.
- Distributing hardware has become less difficult in India following the allowance of 100% foreign ownership in the single-brand retail segment. Despite an advantage like this, Apple has yet to open an official store in India, and is continuing to outsource its iPhones to local carriers as well as to lesser known, third-party stores.
To its credit, Apple has recently made attempts to increase the number of its Indian employees (by 30% to 170 people, according to the Verge), and is apparently planning to introduce Apple TV to the country. However, as Malik and a recent WSJ article suggest, a lot more needs to be done on Apple’s part, and quickly. The growth of smartphone interest in India, the rise of flourishing business areas in major cities like Delhi and Bombay, and the foreign-business-friendly policies are all examples of the sorts of advantages that Apple can, and should, immediately grapple onto. The introduction of the rumored “budget” iPhones, which may be released during the second quarter this year, may provide a necessary boost for the Cupertino company, given the apparent dominance of affordable Android phones in the Indian consumer segment.