India on Apple's radar

The launch of affordable iPhone on March 21 gains importance because it has been timed with Apple's growing interest in emerging markets, especially India. Last month, Apple's global CEO Tim Cook said India was one of the company's most important growth areas for the next decade and noted that the firm was in early preparations to bring its famed iStore to the country. Additionally, the firm would invest $25 million in its first R&D centre in Hyderabad.

In January, Apple reported a 76 per cent growth in iPhone sales in India for the December 2015 quarter, the highest for any Apple market during that period. In a subsequent report, data firm Counterpoint Research said Apple had shipped nearly 800,000 iPhones into India in the December 2015 quarter, its best-ever, helping it take India shipments for calendar year 2015 to 1.7 million units.

Faisal Kawoosa, general manager, telecom and semitronics, CyberMedia Research, said, "Only two to three years ago, iPhone sales would be not more than 5-6 lakh units per quarter. The jump in 2015 has been dramatic, prompting the company to rejig its India strategy, which the firm now realises cannot be divorced from price."

Rival smartphone makers admitted that Apple tasted blood with the iPhone 6s series, its last big launch last year, where it was comparatively flexible with pricing, offering aggressive discounts, EMIs and buyback schemes.

"I will be watching the SE launch closely, since it will determine the way forward for most of us in the future. If Apple chooses to go for masses then it will confirm what has been evident for a long time now that the company is aiming for pole position in India," promoter of a smartphone major told Business Standard. "They are already smartphone leaders in China and markets such as India, Indonesia and Africa have been on their radar for a while now," he said.

According to IDC, Apple's market share in the top 30 cities in India for the December 2015 quarter was 4.6 per cent, while in the tier-II and tier-III cities, it was 2.8 per cent only. Apple, say experts, has been aware that without bringing down price, it will be impossible for it to make inroads into a market like India.

In 2015, India emerged as the second-largest smartphone market in the world after China. Samsung has been lowering prices of it models. Manu Sharma, director, product marketing, Samsung India, had said that the price cut was intended to beat competition by selling more devices. Atul Jain, chief operating officer, smart electronics, LeEco India said, "The era of making (high) profits on superior hardware is a thing of the past. Price rationalisation is on the cards."