OnePlus is crushing Apple’s iPhone dream in India

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Apple iPhone Waiting Game

In 2018, Apple Inc in India witnessed the stuff that nightmares are made of.

iPhone sales in India fell nearly 50% year-on-year last year. The company sold just 1.7 million smartphones in 2018 as compared to 3.2 million in 2017, according to data from Hong Kong-based Counterpoint Research.

A major factor behind iPhone’s poor performance was the increase in competition in the premium smartphone segment, said Tarun Pathak, associate director at Counterpoint, citing the meteoric rise of OnePlus as a game-changer.

As Apple lost ground in the over $400 (Rs28,310) price band, OnePlus clocked its highest ever shipments in a quarter in the three months ending September 2018, pushing the overall smartphone average selling price (ASP) in the online space to $166 from $156 in the year prior. The Shenzhen brand holds over 37% of the premium smartphone segment in India now.

The latest models, iPhone XS Max and iPhone XR, are priced atrociously even for Apple loyalists and the weak rupee has done consumers no favours.

“The $1,000-plus price tag for new (iPhone) models—even after the offers—was too much for the buyers,” Pathak added. “So, the older generation iPhones which used to drive volume were hit by Android flagships and new ones were costly.”

In a Jan. 02 letter to investors, Apple CEO Tim Cook recognised that many markets across the world—especially China—looked bleak. This makes India more important than ever before. So, in 2019, Apple will be trying to right its wrongs in the country.

Already, the Cupertino giant has started streamlining channel operations, experts told Quartz.

“At the beginning of 2019, Apple began reining in distribution to ensure strict price control across all channels,” said Rushabh Doshi, research manager at Singapore-based market research firm Canalys. “Online retailers were no longer able to subsidise costs of the device heavily to ensure growth in GMV (gross merchandise value), thereby hurting sell-through and demand of the expensive iPhones.”

To reduce costs, it’s trying to focus on affordable iPhones, likely through starting to manufacture in India, Navkendar Singh, associate director at International Data Corporation (IDC) India, said. The cost savings could then be passed onto consumers or used for channel expansion and marketing.

Moreover, the California-based tech behemoth could also look to “grow revenue from its services, by making them ubiquitous,” Doshi of Canalys said. In fact, it has started taking baby steps to open up its walled ecosystem already.

view Quartz
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