Apple has poured a lot of money into trying to capture a big chunk of the growing smartphone market in India. But the average resident doesn’t have a lot of money to buy an iPhone.
A report by Counterpoint Research shows iPhone sales are falling in what is seen as Apple’s first decline in four years.
The report, published by Reuters news service, says Apple is likely to sell as many as a million fewer iPhones this year, while competitors like Samsung and meteoric Chinese upstart OnePlus continue to make gains with cheaper handsets.
India iPhone sales: Price is only one challenge
The math shows just how impractical an iPhone purchase is to the average Indian, whose income is about $2,000 annually. The budget iPhone XR still costs 76,900 rupees or $1,058.
“I look for storage, camera and processor in phones and cheaper alternatives like OnePlus are more value for the money,” one software engineer told Reuters. “The new iPhones cost almost 100,000 rupees. I can get three good phones for that price or even a decent gaming laptop.”
During this week’s Diwali Festival of Lights in India, electronics merchants see brisk business. Stores licensed to sell Apple products were largely empty, according to Reuters. Meanwhile, the software engineer, who intended on buying an iPhone, opted for a OnePlus smartphone.
Counterpoint Research said Apple’s iPhone sales could drop from three million handsets to two million.
More than half of Apple’s iPhone sales come from older, cheaper models, like the iPhone SE, but researchers found even with wealthier consumers, Apple’s Q3 sales fell behind Samsung and OnePlus.
Apple, as the Reuters report explains, have been dogged by issues that go beyond iPhone prices.
India’s government slaps high import duties on electronics not produced in the country. Though Apple has two older models assembled in India, more than 70 percent of all iPhones are imported, which makes them out of reach for many consumers there.
“Apple doesn’t have enough confidence in the Indian manufacturing system right now to set up plants and move some of its manufacturing out of China,” analyst Navkendar Singh told Reuters. “In the process, they are losing around 15 to 20 percent of their tax incentive, which they could have passed on to the consumer.”