At a time iPhone sales are dipping worldwide, young and aspirational India may hold out hope for Apple as it readies to launch the latest version of its iconic phone next month.
Although, in keeping with the global trend, iPhone sales have registered a drop in India as well, Apple CEO Tim Cook is hoping for an uptick when exclusive iStores open in a country where South Korean giant Samsung has long dominated the premium segment.
According to global market research firm Strategy Analytics, Apple shipped 800,000 smartphones to India in the second quarter this year — down from 1.2 million units in the same quarter last year.
Apple also reported a 15 per cent drop in iPhone sales globally, from 47.5 million units to 40.4 million in its recent second quarter results.
Samsung’s second-quarter smartphone shipments were estimated at about 72 million units worldwide — almost double Apple’s figure. And experts believe the just-launched Galaxy Note 7 will take a further bite out of Apple’s sales.
In this scenario, can the Apple iPhone7 (although the name is not finalised yet) make a dent in Samsung’s domination, especially in India?
“Samsung has an edge over Apple going into the festive season this year. With the successful GS7 series still going strong and further ramping up its portfolio with a refreshed Note 7 series, the momentum is surely with Samsung,” Tarun Pathak, Senior Analyst, Mobile Devices and Ecosystems, Counterpoint Research, told Agency.
However, he was quick to add, “It will all depend on whether Apple will surprise us with something mind-boggling in its iPhone 7 series.” The entry of the new iPhone may well make for a competitive and exciting festive quarter in the premium segment.
“Apple will look up to its over one billion community to see if it garners better upgrades as compared to last year and, at the same time, price cuts can be anticipated to tap into the demand in countries where Apple continues to be an aspirational brand,” Pathak added.
What will the new iPhone have? If rumours are to be believed: a dual rear camera, a pressure-sensitive home button, Bluetooth-supported headphones, dual speakers at the bottom and Type-C interface (remember LeEco?), signalling the end of the 3.5 mm headphone jack in the iPhone family, are some of the likely features.
According to Faisal Kawoosa, lead analyst with CyberMedia Research (CMR), India has always been a significant market for any handset maker, including Apple.
“However, as the trend of upgrading intensifies, the market will become even more important for Apple,” Kawoosa told Agency, adding that iPhone has its own ecosystem, as there are takers for Samsung as a premium Android brand.
Unlike the US and China, India has been a highly price-conscious market, with almost 70 per cent of the smartphone sales being below $150 (a little over Rs 10,000).
“As a result, Apple’s higher-priced iPhone portfolio has limited its opportunity to grow at the same pace as the market. However, India is a mobile-first country with more than half of the population being young; and smartphones have become an integral part of their lives, which Apple must be looking at,” Pathak noted.
As these young consumers become more mature smartphone users, there is a greater opportunity for Apple to lure them with its robust and attractive ecosystem and a portfolio which has become a coveted status symbol.
“From the aspirational value point of view, it is an attractive market for Apple, but the affordability factor also needs to be taken care of,” Pathak pointed out.
According to experts, a less expensive entry-level smartphone (within the Apple portfolio) will help it gain more traction in India like it did with “Apple iPod Shuffle” — without losing its brand value.
Kawoosa, however, sees the newly-launched 4-inch iPhone SE as a misfit. “Honestly, as of now, I see it a misfit as the device has not been able to fetch much for Apple, at least in India on which it was initially focused,” Kawoosa said.
According to IT research firm Gartner’s Vishal Tripathi, Apple lovers in India are anxiously waiting for the next iPhone device to arrive.
“For those with an iPhone 6 (including me) and iPhone 6 Plus, the iPhone7 is what excites us day and night. It has been two years since a premium iPhone device came from Apple. I expect a beeline for the iPhone 7 in India if specifications and price, including options like EMI and buyback, are set just right,” Tripathi told Agency.
Take your pick. The stakes are high but Apple has a huge fan following — and the neo-rich youth of India could give iPhones a new lease of life.