In the Apple’s Q2 2016 earnings call, Tim Cook threw light on how the vendors are performing in the Indian market. To our surprise, the iPhone sales in India are up by 56% as compared to last year. The company sold over 800,000 iPhones in India in Q4, 2015 with the main increase owing to the release of iPhone 6S and 6S Plus in the market and not to forget the aggressive discounts being made available to the consumers.
With the slow and steady spread of 4G networks in India, Tim Cook feels that it will “unleash the power and capability of the iPhone.”
And then on emerging markets, if you look at India we grew by 56 percent, and we’re placing increasing emphasis in such areas where it’s clear there will be disproportionate growth versus the more developed areas.
And from an India point of view, if you look at India—and each country has a different story, a bit—the things that have held not only us back, perhaps, but some others as well, is that the LTE roll-out with India just really begins this year. And so we’ll begin to see some really good networks coming on in India. That will unleash the power and capability of the iPhone in a way that an older network, 2.5G or even some 3G networks, would not do.
Tim Cook also talked about the challenges Apple faces in India with respect to how the company is not selling the phones directly to the consumers:
Unlike the U.S. as an example, where the carriers in the U.S. sell the vast majority of phones that are sold in the United States, in India the carriers in general sell virtually no phones. And so it’s out in retail, and retail is many, many different small shops, and so we’ve been in the process—we’ve got something we’ve just started in the last few weeks—we’ve been working in India for a couple of years, or more, but we’ve been working with great energy over the last 18 months or so, and I’m encouraged by the results that we’re beginning to see there, and we believe there’s a lot, lot more there.
In India, Apple works on the franchisee model wherein it has partnered with a lot of retail stores across the country. However, the company has now sought permission from the Indian Government for a single-brand license which would allow the vendors to set up retail stores and sell the products directly to the consumers.
Tim Cook further adds:
It is already the third-largest smartphone market in the world, but because the smartphones that are working there are low-end primarily because of the network and the economics, the market potential has not been as great there, but I sort of view India is where China was maybe 7-10 years ago, from that point of view. And I think there’s a really great opportunity there.