Apple has been struggling in India, one of the largest smartphone markets in the world. The reason behind this is the high prices of iPhones in India and stiff competition from Chinese brands. This has forced Apple to change its strategy in India where it will now exit small stores where its monthly sales do not exceed 35 units and whose floor size is less than 350-400 sq. ft.
Apple is hoping to reduce its costs with this move. It will also focus more on Apple-exclusive stores which are usually over 500 sq. ft large. It even wants all of its trade partners to have one such store.
“Apple wants fewer trade partners in India, and to deepen the relationship with them. This is to improve the selling experience and ensure compliance of the store as per its terms. The larger Apple Premium Reseller stores, too, are a big focus area,” an executive said.
Apple will also stop selling the iPhone 6 and iPhone 6 Plus in the country. Up until early 2018, the iPhone 6 and iPhone 6 Plus were among the hottest selling iPhones for Apple in India. However, these phones have become old now and are simply not competitive enough when compared to offerings from the likes of Xiaomi, Oppo, and Vivo. Apple also silently removed the iPhone SE from sale in India as it wanted to shed its tag of selling discontinued products in the country.
By stopping the sales of iPhone 6 and iPhone 6 Plus, Apple will be pushing the entry-level prices of iPhones in the country. While the iPhone 6 started from Rs 24,990, the iPhone 6s retails for Rs 29,900 in India. Apple will not be discounting the iPhone 6s despite discontinuing the iPhone 6 as it wants to retain its premium image. The iPhone 6 was the first smartphone that Apple’s partner started manufacturing in India. This was later expanded to include the iPhone SE and iPhone 6s as well.
Apple is also reducing its distribution partners in India. Up until last year, it had five distributors but starting from April, only two — Ingram Micro and Redington — will remain. All these changes have come into place since Ashish Chowdhary — a former Nokia executive — took control of Apple India operations.
Our Take
Despite all these changes from Apple, iPhone sales are unlikely to see a boost in the country. That’s because it still does not solve the major issue of high iPhone prices in the region. Apple partner Wistron has received the approval from the government to set up a Rs 5,000 cr factory where it would produce high-end iPhones like the iPhone 8 and iPhone 8 Plus. However, the benefits of such a move will only be visible by the end of this year at the earliest.
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