An ET report today claims that Apple’s iPhone sales in India grew four-fold in the last quarter of 2012. Yes, Apple is getting aggressive in India and demonstrated that during the weeks leading up to the iPhone 5 launch by cutting its cords with carriers, launching the iPhone in open market and hiring more people in sales and marketing functions. It has also increased its advertising in India via its distributors Redington and Ingram Micro, and has also tied up with banks to offer EMI options, which has led to increase in sales. But is this growth sustainable?
The quarter when Apple launches a new iPhone is usually the one that witnesses a massive spike in Apple’s sales numbers. That’s not to say that the steps Apple took in India did not help its cause but saying that’s the only reason for the spike and Apple can sustain it is being naive. It will be difficult for Apple to sustain this spike even in the current quarter and historically iPhone sales go down starting from the third quarter post a new iPhone launch as consumers avoid buying one as they wait it out for Apple to launch the next version.
A bigger challenge for Apple is competition, especially that from Samsung, which has a wider distribution net and has more marketing muscle than Apple in India. Also, the fact that Apple does not drop prices of the iPhone until a new variant is announced does not help its cause.
These are still early days for Apple in India as it learns the nuances of the market. Taking distribution away from carriers and launching the iPhone in open markets was the first step. If Apple needs to really succeed in India, it will have to reconsider its pricing practices (unlikely to happen) and also have more than one iPhone launch in a year in order to have a sustained growth throughout the year.
This is not to say that Apple’s market in India is not growing. But it is certainly not growing as fast as some reports would like us to believe.