Apple is finally getting a foothold in the world’s second-largest smartphone market

Catching attention.
Catching attention.
Image: Reuters/Shailesh Andrade
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India’s appetite for the iPhone isn’t just limited to big cities, recent data published by market intelligence firm IDC shows, suggesting that the company is making inroads into Asia’s third-largest economy.

iPhones made up nearly 3% of the total smartphone sales in mid- and small-sized (tier-II & III) Indian cities during October to December 2015, according to IDC.

Apple’s products hold deep aspirational value in India but have struggled to take off in the world’s second-largest smartphone market due to steep pricing and poor supply channels. The American software giant’s overall marketshare in India stood below 1% in September 2015, and the company still trails way behind its Korean arch-rival Samsung in India.

But, “with increasing data penetration and enhanced reach of e-commerce, the smartphone consumers in tier-two and -three cities are becoming more aware and demanding,” Jaideep Mehta, managing director, IDC South Asia said.

In larger (tier-I) Indian cities, the iPhone enjoyed a larger market share during the last quarter of 2015.

Prices of iPhones are among the highest in India compared to other countries. This has made it difficult for Apple to compete in a price-sensitive market where devices sell for as low as $4.

The company has been working to increase its focus in India as growth in larger markets tapers off. Among other things, it has contracted with new distributors and offered a range of enticements like discounts and buyback schemes. It’s also trimmed the prices of some iPhone models to entice buyers. In December, it slashed the price of its popular iPhone 5s for the third time in three months.

These measures may be helping Apple get some hold in markets that matter.

iPhone sales made up 4.6% of the overall smartphones sold in India’s top 30 cities between October and December 2015—which constitute 51% of the country’s total smartphone sales.

The company’s current investments may pay off, according to IDC’s analysis. “The coming 4G revolution is promising to trigger the next wave of smartphone growth with 4G-enabled devices already overtaking 3G devices as the largest smartphone category,” Mehta said.