According to data released yesterday by Strategy Analytics, Android now has an overwhelming command of the Indian smartphone market. Shipments grew 19 percent annually to reach 31 million units during the second quarter of 2016 but only a tiny minority represented Apple’s handsets.
The company managed to sell just 800,000 phones in the region during the quarter, a significant decline from its already dismal results last year. It shipped 1.2 million iPhones to India in the second quarter of 2015, 50 percent more than it managed in the same period this year.
The company’s market share has been halved from four percent to just two percent in India during the past year. This has allowed Android to climb up seven percent to a record high of 97 percent market share, achieved through 29.8 million sales during the second quarter of the year.
Analysts blamed Apple’s famously high pricing for its struggles. It doesn’t compete in the low-end budget market, preferring to concentrate on creating premium products that people aspire to and regard as high quality. In India, this approach has been doomed to failure though. With few consumers able to afford an iPhone and the smartphone market still developing, Apple is unable to find buyers for its devices.
India is being hailed as the most promising smartphone market in the world, the last remaining significant region that hasn’t yet fully emerged onto the Internet. The average price paid for mobile phones in the country is still below $70 though, a problem for Apple which starts its pricing at around $300.
“Apple iOS fell 35 percent annually and shipped 0.8 million smartphones in India in Q2 2016,” said Woody Oh, Director at Strategy Analytics. “Apple’s smartphone marketshare has halved from four percent to just two percent in India during the past year. Apple iOS will need to reduce iPhone pricing to cheaper levels, attract more operator subsidies and enlarge its retail presence through Apple stores or online channels if it wants to regrow significantly in the future.”
Apple can’t solve its issues simply by selling cheaper phones. It has demonstrated countless times before that it won’t create a deliberately low-end or budget-friendly product. Reducing the cost of iPhones could lead to an expectation of price drops in other emerging markets too, leaving Apple unable to raise prices later on without aggravating consumers.
However, if the company is to conquer India as it has America and Europe, it needs to start shifting phones. With only 800,000 moving per quarter, iOS is hardly going to be a familiar platform to the majority of Indian consumers.
Strategy Analytics said that Android currently looks “unbeatable,” supported by a wide range of handset manufacturers and popular services like Google’s Gmail. Many of Apple’s services, such as iCloud and iTunes, remain relatively obscure in the region.
Apple is aware of its problems. During his tour of India earlier this year, CEO Tim Cook told local TV channel NDTV that Apple is “taking a step back” to view India in a more strategic light. He noted that India’s smartphone market currently resembles China’s as it was “seven to 10 years ago,” suggesting Apple could simply wait until it reaches maturity before aggressively promoting phones.
That approach is unlikely to work though. With Android already popular in the country and rapidly gaining new features, consumers could become too attached to Google’s platform to consider moving to iOS.
Apple is already stepping up its efforts in India. It has invested in new facilities in the country and setup an app accelerator to encourage Indian app developers to build for iOS. The company is approaching the country with a long-term development plan to enable it to have a presence “for a thousand years,” although it could be a decade before it meets with any real success.
