Apple faces new challenges in India

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iPhone-India
Apple's struggling to grow its brand in India.
Photo: Ste Smith/Cult of Mac

There’s more bad news for Apple’s fortunes in India. According to a new report, the iPhone XS and XS Max have seen lower sales in the Indian market than previous devices after the first weekend.

What’s more, they could be about to face new government-imposed challenges, too.

As per the Economic Times, several large retailers in India report having slightly considerable iPhone stock left after the first weekend on sale. This is the first time this has happened, and is “in stark contrast” to previous years.

Sales of the new devices is reportedly around 55-60 percent of what last year’s iPhone X racked up in its first three days on sale. While the handsets sold slightly better than the iPhone 8, it still represents a decline in business — likely aided by the fact that the new handsets are pricier than ever in a market where most phones sold are low-cost models.

This would be disappointing for Apple which has tried to increase its brand penetration in India, albeit apparently without much success. Currently, Apple has a market share of just 2 percent in India. In a country with a population of 1.324 billion people, Apple supposedly sold fewer than 1 million iPhones in the first half of 2018.

Hopefully, the iPhone XR will help turn things around somewhat when it launches later this month.

More problems in India

Compounding the problem is the fact that iPhones could face new import restrictions in India as well. In a recent interview, the Economic Advisory Council member Rathin Roy said that the Indian government should make it less appealing for citizens to enjoy luxury imported good.

“We need to actively send signals to disincentivize or discourage increase in consumption of what I describe as explicit luxuries,” Roy said. This follows the government raising import taxes on a number of goods, with the possibility of this happening again in the future.

This is something which has already hit Apple in India. Previously, the company raised iPhone prices by 6 percent to 7 percent when customs duty on smartphones in India increased from 10 percent to 15 percent and, later, to 20 percent. New import restrictions, or extra price hikes, could hurt Apple’s prospects in the country.

Recently, Apple has clashed with the Indian government over an app Apple worried infringed on its privacy policies. It has also run into problems with its ambitions of opening official Apple Stores in the country.