Apple’s winning formula in India: iPhone’s market share on track to touch 7% by year end

Apple, which held a mere 2% market share in 2019, increased its presence in the Indian smartphone market to 4% by 2022, and thanks to record sales in the April-June quarter, it has risen to 5%. Apple now is looking to raise its market share to an impressive 7% by the end of this calendar year.

India, the world’s second-largest smartphone market, is seen as a price-sensitive one. But as a significant number of users are transitioning from feature phones to smartphones or upgrading from entry-level devices, the mid-segment category dominates the market. Phones priced between Rs 7,000 and Rs 25,000 make up more than 79% of the market share. The iPhone remains an aspirational choice for consumers in this segment.

Considering the Indian market’s potential, Apple has been putting in all its resources. “We ought to be doing really well there, and we are very pleased with our growth there. We still have a very, very modest and low share in this smartphone market, so I think it’s a huge opportunity for us. And we are putting in all of our energies to make that occur,” Apple CEO Tim Cook said.

Concurring with this, Prabhu Ram, Head of Industry Intelligence Group (IIG) at Cyber Media Research, says, “At CyberMedia Research, our research estimates point to Apple maintaining a healthy growth trajectory in India, potentially garnering 7% market share in the hypercompetitive smartphone market.” During the April to June quarter, Apple secured a 5% market share, largely propelled by the success of both the latest iPhone 14 series and the previous-generation iPhone 13 series.

“We did hit a June quarter revenue record in India, and we grew in strong double digits,” Cook said early this morning during the quarterly earnings call.

What did Apple do right?

Apple has been selling iPhones in India since 2008, but it is only in recent years that the company has shifted strategy to make iPhones more accessible through various offers and promotions, which has contributed significantly to the increase in market share. By adopting this approach, Apple has been able to attract more customers and increase its sales in the country.

Apple has collaborated with HDFC Bank to provide financing options and cashback deals, making it more convenient for customers to buy iPhones. Additionally, they have introduced trade-in programs, allowing consumers to exchange their old phones for credit towards purchasing new iPhones. Also, during festive sales, older iPhone models are offered at discounted prices for a limited period, attracting more buyers.

As a result of these initiatives, industry sources suggest that around 40% of iPhone sales in India are now online.

Recognising the immense potential of the Indian market, Apple, which initially relied on traditional distribution channels and e-commerce platforms, expanded its presence by launching official Apple Stores here. The company launched its Online Apple Store in India in September 2020, in the middle of the pandemic. However, due to the pandemic, the Cupertino-based giant opened its Apple Retail Stores in Mumbai and Delhi only this April.

The launch of these physical Apple Stores created a lot of excitement among consumers, resulting in a significant increase in footfall. The physical presence of Apple’s retail stores has translated into increased purchases and sales, according to sources familiar with the matter.

“We also opened our first two retail stores during the quarter and of course it’s early going currently, but they are currently beating our expectations in terms of how they are doing. We continue to work on building out the channel and putting more investment in our direct-to-consumer offers as well,” said Cook.

Indeed, another crucial factor contributing to Apple’s success story in India is the improvement in the availability of iPhones. In the past, India used to be in the third phase of the global iPhone launch, resulting in delays of several weeks before the official release. This gap stoked the rise of a grey market, where people would import iPhones from other countries and sell them here unofficially.

However, Apple recognised the significance of the Indian market and changed its strategy. In recent years, India has been included in the first phase of the global iPhone launch. As a result, iPhones are now available in India on the same day that they are launched in the US, UK, or Japan. This has been instrumental in curbing the grey market and has increased consumer confidence, as people can now purchase the latest iPhones officially and without significant delays.

Moreover, this strategic shift also aligns with the festive sales period, such as Diwali, which is a peak shopping season in India. By launching the iPhones in India during this festive period, Apple can capitalise on the increased consumer spending and enthusiasm, further boosting its sales and market share in the country.

It is anticipated that this year, Apple will continue its tradition of releasing the latest iPhone, likely named iPhone 15, in September, aligning it perfectly with the festive season.