iPhone 11 breathes life back into Apple in India

In the pink of health.
In the pink of health.
Image: Reuters/Stephen Lam
We may earn a commission from links on this page.

Seems like Apple’s dog days in India are finally drawing to a close.

The Cupertino-based phonemaker had its best quarter yet in India at the end of 2019, shipping close to 925,000 iPhones, according to research firm Canalys. Its previous record in the country was in the third quarter of 2017, when it shipped 890,000 phones.

For a brand that was posting negative growth a year ago, the record-breaking figure was more than 200% higher than its shipments in the same quarter of 2018.

Apple’s success is largely owing to the iPhone 11, with its more affordable price tag and the excitement around the dual and triple cameras.

“Apple hit a home-run with its pricing strategy on the iPhone 11,” Canalys analyst Madhumita Chaudhary said in the Singapore-based firm’s Jan. 29 press release. The device starts selling at Rs64,900. A partnership with HDFC Bank made iPhones more affordable as the lender offered a Rs6,000 ($84) instant cashback.

India is a price-conscious market where most devices cost below $200 (Rs14,296). Apple’s nearly-$1,000 devices have been struggling to find takers in the country. It doesn’t help that Apple products have always been 10-18% more expensive in India than elsewhere in Asia.

So far, rivals in the premium segment have been winning on price. However, the iPhone 11 may have turned the tables. “The new iPhones have appealed not just to current iPhone users looking to upgrade, but also to value-conscious premium phone purchasers that are now presented with a formidable price-alternative to the Samsung or OnePlus flagships,” Chaudhary added.

Apple was one of the fastest-growing brands in the last quarter of 2019 “driven by multiple price cuts on its XR device, thanks to local manufacturing in India,” Hong Kong-based Counterpoint Research said on Jan. 25. In September 2019, Apple slashed the price of older iPhone models in India, starting from iPhone 7 by at least Rs10,000.

When Apple dropped the price of the iPhone XR, initially priced at Rs76,900, by a whopping Rs27,000, sales skyrocketed.

Click Next to Continue ➡️

In 2019, Apple shipped 2 million iPhones versus 1.6 million in the year prior.

Another strategy that’s posting more growth than device sales, is offering accessories.

Globally, Apple has already seen positive results in the quarter ended December 2019: Its wearables, home and accessories category, including AirPods, surged 36% to $10 billion.

Its services business, including Apple Music and streaming platform Apple TV+, grew an impress 17% to reach $12.7 billion, as per its financial statements.

As expansion gets harder with India’s smartphone users already surpassing 500 million, “riding services on top of the active user base to generate consistent revenues” is a sound strategy, Gurugram-based techARC said in a Jan. 30 press release. In India, Apple is already making a big push for these services by slashing prices. It offers Apple Music at just Rs120 ($1.74) per month compared with $10 in the US. Apple TV+ costs Rs99 ($1.40) a month—a departure from the $4.99 it costs in the US and a formidable rival for Netflix (Rs500/$7.06) and Amazon (Rs129/$1.82 for Prime).

Overall, Canalys expects the Indian smartphone market to grow by 8% in 2020, to over 160 million units.  “With all eyes on the 2020 budget, vendor short-term and long-term prospects will depend on government regulation and taxation,” said Canalys research analyst Adwait Mardikar. And Apple, specifically, stands to gain from policy changes, reports suggest.

For instance, the government is planning to offer subsidised loans to mobile handset manufacturers in a bid to attract the likes of Apple and Samsung to open factories in the country.

After India relaxed its foreign direct investment laws, reports suggest the elusive Apple stores may finally come to Mumbai and Delhi by next year.

Meanwhile, Apple will likely launch its online store this year. It’s just waiting till CEO Tim Cook visits the country in mid-2020—his second trip after 2016—and a new line of iPhones and iPads are ready to be released.