Apples from India, still selling at a reduced price?


Editor’s note: This article is from KrASIA, author Moulishree Srivastava, and the original title is Apple tweaks India strategy to kick-start growth.In the past year, Apple’s performance in India has been bleak.A few months ago, Apple significantly reduced the prices of several popular older models, including the iPhone 7, 7 Plus, iPhone 8, 8 Plus, XS and XR.Apple’s flagship iPhone 11 launched this year starts at $ 895, about 16% cheaper than when the iPhone XR was launched last year.This year, Apple also reduced the price of the iPhone XR from $ 1,075 to $ 698.It’s not enough to just lower prices. Apple and its partners are holding up the banner of “Made In India”.According to media reports, Apple promised to invest 1 billion US dollars in India through its partners to expand production in India.Last quarter, Apple began production of the new iPhone XR in India. Previously, only older models such as the iPhone SE and iPhone 6 would be assembled in India.Apple suppliers have also shown interest in India, such as Finland-based Salcomp, which has agreed to invest $ 270 million in India from March 2020 to make mobile phone chargers and other smartphone accessories.So there is such a scene.Ravi Shakar Prasad, Minister of Communications, Electronics and Information Technology of India, posted the new iPhone XR assembled in India on Twitter with the text: “I am very pleased to receive this iPhone XR, which says’ Designed by Apple of California,”Assembly in India.” Expect #Apple to further expand its manufacturing in India. “Given India ’s recent relaxation of foreign direct investment standards for single retail brands, Apple also plans to open a large number of stores in India.Can a three-pronged approach restore Apple’s slump in India?The cloud of the annual report appears to the outside world that Apple lowered the price of its flagship product this time in order to restore the decline in profit in the Indian market.Documents from the Indian Companies Registry show that in fiscal 2019, Apple India’s business revenue was $ 1.46 billion, down 19.2%; profit was $ 36.6 million, down 70%.According to data compiled by Hong Kong-based market research company Counterpoint Research, Apple reduced its forecast for mobile phone demand in the Indian market in 2018, with only 1.7 million units shipped, compared to 3.2 million in 2017..Apple’s market share in 2018 also fell from 2.4% in the previous year to 1.2%.Industry insiders point out that 50% of the iPhones sold in India are old and cheaper models, not new ones.Counterpoint Research partner and research director Neil Shah told KrASIA: “Apple’s biggest challenge in India is selling new models.” Shah explained that when Apple introduced the X-series XS and XS Max last year, both phones were priced.Over $ 1,383, the XR will also sell for nearly $ 1,076, which is why Apple’s underperformance.”At the same time, Apple is reducing the supply of older models such as the iPhone 6, 6S and iPhone 7, and shifting the public’s attention to these models because of the high cost of production of devices that use four generations of old components,” Shah said.”These models are sold in India and other emerging markets, but the sales are not high. This has also led to a decline in Apple sales.”Prabhu Ram, head of industry research at market research firm CyberMedia Research (CMR), said that Apple has adopted a “cautious pricing strategy” over the past year to attract price-sensitive Indian consumers.Ram told KrASIA: “Apple is like walking a tightrope. On the one hand, it has to cater to consumers who tighten their wallets. On the other hand, it has to ensure that it does not damage the image of its high-end brand.” In August 2019, Apple said it would invest 1.395100 million US dollars to open retail chains and online malls.Ram believes that the offline scene is still the key to opening up the Indian market.Apple’s retail stores are an important extension of the brand’s overall philosophy and an important channel for consumers to interact with the brand.”Apple’s retail strategy has created more powerful opportunities, and the company is expected to re-establish contact with target customers and re-establish the image of high-end smartphone brands in India.” Shah of Counterpoint said that Indian residents mostly use Google’s Android ecosystem, AppleNot only should we promote the ecosystem of Apple services and hardware among existing users, but also expand the user pool and attract more new users to join.”This strategy may not prioritize profitability, but it provides an experience that indirectly markets Apple products. With retail stores, Apple can introduce users to the ecosystem of Apple’s software, hardware, and servicesSystem, “he said,” after selling an iPhone to a user, Apple has a greater chance of selling MacBook, iPad, headphones and Apple TV, Apple Music and other services. “Shah believes that Apple can average severalSell ​​a product worth about 3000-4000 dollars to a user within one year.There are huge opportunities for high-end machines in the Indian domestic market, but the high-end smart phone market is very limited.According to Counterpoint’s data, the number of high-end smart phones priced at more than $ 420 accounts for only 4% of the entire smart phone market, and high-end smart phones priced at more than $ 489 account for only 2%.Although Apple has the largest share in this 2% market, the millions of devices sold each year in India are still less attractive than the Chinese and American markets.Annual sales in China and the United States are 40 million units and 75-80 million units, respectively.Apple’s new plan is to make India an export hub to meet Asian demand.After the photo of the apple was shown, Minister Prasad, Minister of Communications, Electronics and Information Technology of India, told the media: “All Apple products and all mobile phones manufactured in India will be sold in the Indian domestic market and will also be exported.”Ram believes that as the global restructuring of the manufacturing supply chain continues, India offers Apple “an opportunity.””For example, an iPhone made in India can help Apple avoid 20% import tariffs. It can also help Apple continue to advance its aggressive device pricing strategy and ultimately achieve consumer benefits.” Ram said.”Similarly, Apple is investing in software and services by setting up R & D centers in Bangalore and Hyderabad. It can be seen that Apple is overweight India.” However, Faisal Kawoosa, founder and chief analyst of research firm Techarc, believes that Apple is simply avoidingIt is too early to cut prices sharply after import tariffs.Kawoosa told KrASIA: “In the manufacturing process, Apple needs to achieve economies of scale and improve production efficiency in order to benefit consumers, which may not be achieved in the short to medium term.” Shah said, joining the “Made in India” programIt has indeed earned Apple some impressions in front of the Indian government, and it has also given Apple chips to fight for more benefits from countries such as Vietnam, Brazil and Mexico, which may want Apple to establish production bases in their countries.However, even if India has become one of Apple’s most important markets, Apple’s global strategy is still largely US-centric.”Everything is designed for American consumers,” Shah said. “Apple’s strategy in India is more of a last resort than it is in the four most important markets, the United States, China, the United Kingdom and Japan.Strategy. “Ed | 郭 沈 @ 36 氪 出 图 | Unsplash.