Apple’s trouble with the developing world

Why India isn't interested in buying iPhones

Published in El Pais, 31 July 2018.

When it comes to best selling smartphones iPhone always comes to mind. Whatever your opinions are you cannot deny its popularity, people line up for days, making many financial sacrifices to purchase the phone, and for those who cannot afford the latest model they are desperate to at least get a used one, even if it is a few years old. It is because of this it may come to a complete shock that this is not the case throughout the world, most notably India where iPhone continues to sell poorly. Not only is the phone not in first place its not even in the top 5.

The reason for this should surprise no one. The most popular phones on the market sell for roughly $150, any phone costing roughly $450 is considered a premium model, of course the iPhone X has certainly surpassed this, only the budget iPhone SE, priced at $380 comes below that and is still well above the average cost. Price is not the only reason however as many consumers in India look past the brand and solely focus on specifications, if “Phone A” has 8gb of ram at $200, why buy an SE if it only has 3gb?

Now Apple has always had a business model of markup over volume with their phones selling for as high as 45% above cost and that is not necessary something that needs to change as their phones sell very well elsewhere in the world. The fact is, should Apple wish to do well in India it would need to do a complete over hall of their business model, with phones comparable in prices in the budget range and offer features such as expandable storage, something Apple has never done.

Of course, this is the case with many developing countries as many simply cannot afford premium models and instead go for cheaper options, but what makes India special is that it is considered one of the largest markets in the world and being able to develop even a small market share would mean big business. Apple of course is not lost on this and has repeatedly made efforts to try and increase their market share, even secretly resuming production of the iPhone 6, a 4-year-old model no longer available in the rest of the world. Some of it has helped, but not nearly as much as they would like.

It seems Apple is now at a crossroads, do they continue to shut out the developing world by continuing to make their phones out of reach, or they embrace it by following other developers by making cheaper, customizable phones. Knowing their history, I suspect the former, but to give up on a market like India will surely at least have them considering the latter.

About Matthew Glezos 420 Articles
Matthew is Canadian and has a Master in Business Administration. He has international experience in marketing and strategy. He has a strong interest in technology and combines it with the business side.

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