Here’s why Apple is struggling in India

iPhone XR Hands
Image Credit: Apple

There’s a new report out about the state of Apple’s business in India. It seems the iPhone maker isn’t doing that well in the country this year, grappling with encroaching Android rivals and sky-high prices.

According to Counterpoint Research, Apple will sell just 2 million iPhones in India this year. It sold 3 million units last year, making this the first decline it’s faced in 4 years. Even CEO Tim Cook confessed to poor sales during an earnings call with investors last week.

Why iPhones Are Failing In India

The key problem appears to be cost. Reuters (via Livemint) reports that the average per capita income in India is $2000/year. The cheapest new iPhone is the iPhone XR which costs Rs 76900 (approx $1058). Naturally, people aren’t eager to spend half their income on a phone, especially when there are so many alternatives available.

The article specifically highlights a man named Samee Alam who was planning to buy an iPhone during Diwali sales, but ended up going with OnePlus instead. He’s not alone either, as the Chinese rival claims around 10 – 15% of its freshly-minted customers are Apple defectors. It’s possible even dedicated fanboys are leaving the iOS ecosystem.

This shows through in rankings as well, with Apple landing in third place behind Samsung and OnePlus in terms of premium phone sales. It’s a different story if you look at revenue since Apple supposedly had a total revenue of $2 billion thanks to the high unit price of iPhones and solid Mac sales.

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OnePlus earned half that, but it looks like this gap is closing. Meanwhile, Apple had a well-publicized shake-up earlier this year when it let go of many top executives and brought in a new India head – Michel Coulomb. Sources say this all went down because the brand went from having 5 distributors to just 2.

Apple could easily lower iPhones rates in India if it started more assembling iPhones in the country. According to an analyst, the company doesn’t have enough confidence in the Indian manufacturing system to set up plants and reduce its dependence on China. It only produces the iPhone SE and iPhone 6S in the nation right now.

Counterpoint thinks Apple’s Indian user base is going to drop by 10% to just 9 million users in 2018. In comparison, there are over 436 million Android users in the market. The iPhone maker will have to do something drastic if it wants to attract new customers and keep its existing base.