Airtel
Now
that it’s carved some significant inroads into China, the world’s
largest mobile market, Apple is turning its attention to the second
largest as well: India.
In the fourth quarter, iPhone shipments to India were about three to
four times what they were in the third quarter, according to new
research from IDC. And the research house expects them to grow roughly
150 percent year-over-year in 2013.
“We have seen overwhelming demand for Apple iPhone in India, not just
for the latest iPhone 5, but also the lower cost previous versions,”
IDC analyst Ryan Keith told
AllThingsD. “It’s a huge market with great opportunity for Apple.”
The reason for this growth? The new iPhone 5, obviously.
But also a more aggressive approach
to a big market that Apple has typically shied away from because of its
price sensitivity and a distribution model the company previously found
unappealing.
In India, Apple sells iPhones on the open market, not through
carriers that subsidize them and in so doing lower their selling price.
And while India is among the fastest-growing wireless markets in the
world, it’s also highly price sensitive. That’s been problematic for
Apple, which has traditionally been unwilling to cut prices to drive
volume.
But recently Apple has been working with Indian distributors to offer
installment-based payment plans for the iPhone. And it has
significantly ramped up its marketing efforts in the country, in some
cases working directly with distributors on advertisements. Apple did
this with TheMobileStore, a national retail chain that operates 1,000
outlets across India, and CEO Himanshu Chakrawarti tells
AllThingsD the effort was a success.
“Following the launch of iPhone 5 we met Apple and both of us felt
that we could significantly energize entry to mid-level smartphone
buyers to upgrade to an iPhone,” Chakrawarti said. “[We ran a campaign]
in January 2013 that was very successful. Our sales jumped about 200
percent.”
Evidently Apple is seeing some decent early results from such
efforts, though clearly it has its work cut out for it. The company has a
piddling share of India’s smartphone market, which is currently
dominated by arch-rival Samsung. But it seems to be working to change
that — as much as it can afford to right now, anyway.
As CEO Tim Cook noted on Apple’s last earnings call, India is not as high a priority as certain other markets, like China.
“I love India, but I believe that Apple has some higher potential in
the intermediate term in some other countries,” Cook said. “That doesn’t
mean that we’re not putting emphasis in India — we are. We have a
business there; that business is growing, but the multilayer
distribution there really adds to the cost of getting products to
market. So we’re going to continue putting some energies there, but from
my own perspective, in the intermediate term there will be larger
opportunities outside of there.”