Why has Apple failed in India?

Curious Elephant

4 Aug 201808:30

Summary

TLDRThe video discusses the low popularity of iPhones in India despite their global success. It highlights the high cost of iPhones in India due to import duties and currency conversion, Apple's late entry into local manufacturing, and the strong competition from Chinese brands like Xiaomi and Vivo. It also points out Apple's lack of adaptation to Indian market needs, such as credit card usage for app purchases and Siri's recognition of Indian accents, which contribute to its struggle in the Indian smartphone market.

Takeaways

📊 iPhones are globally popular, holding an average market share of 18.91% in mobile operating systems.
🌏 In North America and Oceania, iOS usage is highest at 48%, while in Europe it's 24.06%.
📉 In Asia and South America, iPhone's market share is around 10%, and in Africa, it's 7%.
🇮🇳 In India, iOS has a mere 2.9% market share, which is significantly lower than the global average.
💸 The high cost of iPhones in India, with a 30% premium due to import duties and currency conversion, is a major factor affecting sales.
🏭 Apple's attempt to reduce costs by opening a factory in India to produce lower-end models has been a recent development.
📱 Aggressive competition from Chinese brands like Xiaomi, Oppo, and Vivo, with localized strategies and high seller margins, is challenging Apple's presence.
📈 Xiaomi has overtaken Samsung to become the leading smartphone seller in India.
🛑 Apple's inability to adapt to the diverse cultural, religious, and linguistic landscape of India is hindering its market penetration.
💳 Apple's services like the App Store and Apple Music are less appealing in India due to local payment methods and competitive alternatives.
📱 As more Indians become familiar with Android and its ecosystem, Apple may find it increasingly difficult to gain a foothold in the future.

Q & A

Why are iPhones unpopular among Indians?
-iPhones are unpopular among Indians due to factors such as high prices, aggressive competition from brands like Xiaomi and Samsung, and Apple's inability to adapt to the diverse cultural and linguistic needs of India.
What is the market share of iOS globally?
-Globally, iOS has an average market share of 18.91% of the mobile operating system market share.
Which region has the highest iOS usage?
-North America and Oceania have the highest iOS usage, amounting to 48%.
What is the market share of iOS in India?
-In India, iOS occupies only 2.9% of the smartphone market share.
How does the price of an iPhone differ between the US and India?
-An iPhone 10 that costs $999 in the United States costs over $1,300 in India after import duty and currency conversion.
What is Apple's strategy to avoid high prices in India?
-Apple attempted to avoid high prices by opening its own factory in India to produce low-end SE versions of iPhones.
Who are Apple's main competitors in the Indian market?
-Apple's main competitors in India are Xiaomi, Samsung, and other Chinese brands that have adopted localized strategies and aggressive marketing.
What is the impact of Chinese brands on the Indian smartphone market?
-Chinese brands have taken over the Indian market by offering high-profit margins to sellers, resulting in sellers favoring these brands over others.
Why is Apple struggling to penetrate the Indian market despite its global success?
-Apple is struggling in India because its branding and strategies that work in other markets do not resonate with Indian consumers who prioritize specs, features, and affordability.
How does the lack of credit card usage in India affect Apple's business model?
-Since Apple's app store requires credit cards for purchases and only 1% of the Indian population has credit cards, this significantly limits Apple's potential customer base.
What is the future outlook for Apple in India according to the script?
-The script suggests that if Apple does not adapt to the Indian market, it will continue to struggle as more potential customers become familiar with Android and its ecosystem.

Outlines

00:00

📱 Unpopularity of iPhones in India

The speaker, Night, recounts his experience with a group of Indian engineers in Singapore who do not use iPhones, prompting an exploration into the low market share of iPhones in India. Despite global popularity, with an average market share of 18.91%, iPhones are notably less popular in India, with only 2.9% market share. This is in stark contrast to other developing countries like Brazil, Russia, and China, where iOS holds between 11.57% to 21.96%. Factors contributing to this unpopularity include high prices, with a 30% premium due to import duties and currency conversion, and Apple's recent, limited efforts to establish manufacturing in India. The speaker also notes Apple's struggle against aggressive competitors like Xiaomi and Samsung, which have adapted to local markets with strategies such as opening stores in rural areas and offering high profit margins to sellers.

05:01

🌏 Apple's Challenges in the Indian Market

The second paragraph delves into the challenges Apple faces in India, including its high prices and the dominance of Android among first-time smartphone owners. The speaker points out that Apple's strategies effective in other markets, such as brand loyalty and ecosystem integration, are less effective in India due to cultural, linguistic, and economic differences. For instance, the Apple App Store's reliance on credit cards is a barrier in a country where only 1% of the population owns one. The speaker suggests that as more Indians become familiar with Android and its ecosystem, Apple's market share may continue to decline. The paragraph concludes with a call for feedback from Indian viewers and a mention of Apple's recent milestone of reaching a trillion-dollar valuation, highlighting the importance of the Indian market for Apple's future growth.

Mindmap

Keywords

💡iPhone

An iPhone is a line of smartphones designed and marketed by Apple Inc. The term is central to the video's theme as it explores the popularity and market share of iPhones, particularly in India. The video discusses how iPhones are perceived and consumed in different regions, with a focus on their relatively low market share in India compared to other countries.

💡Market Share

Market share refers to the percentage of the market for a particular product that is controlled by a particular company. In the context of the video, market share is used to gauge the popularity of iOS devices, particularly iPhones, across various regions. The script provides statistics on iOS market share in North America, Europe, Asia, South America, and Africa, highlighting the disparity in iPhone popularity.

💡Developing Countries

Developing countries are nations with lower economic development compared to developed countries. The video uses this term to contrast the purchasing power and consumer behavior in India, a developing country, with that of developed nations. It suggests that the high cost of iPhones in India, a developing country, might be a factor contributing to their lower market share.

💡Price Premium

A price premium refers to the additional cost a consumer pays for a product or service over its standard price. The video discusses how iPhones in India have a significant price premium due to import duties and currency conversion, making them more expensive than in the United States. This price premium is suggested as a reason for iPhones' lower popularity in India.

💡Localized Strategy

Localized strategy refers to the adaptation of products or services to suit the tastes, preferences, and cultural norms of a specific region or market. The video mentions that Chinese smartphone brands have successfully implemented localized strategies in India, which has helped them gain market share over Apple, whose products are perceived as less adapted to local needs.

💡Competition

Competition in this context refers to the rivalry between different companies in the same industry, striving for market share. The video highlights the intense competition Apple faces from brands like Xiaomi, Samsung, and Oppo in India, which are aggressively marketing their products and gaining favor with local sellers and consumers.

💡Cultural Adaptation

Cultural adaptation is the process of adjusting to the cultural norms and values of a different society. The video argues that Apple's failure to culturally adapt its products and services to the Indian market is a key factor in its lack of success there. It suggests that Apple's global strategies, which have been successful elsewhere, are not resonating with the diverse cultural, religious, and linguistic landscape of India.

💡Smartphone Ecosystem

A smartphone ecosystem refers to the interconnected services and products that surround a smartphone, such as app stores, music services, and digital assistants. The video discusses how Apple's ecosystem, which includes the App Store, Apple Music, and Siri, may not be as appealing to Indian consumers as local alternatives, contributing to the lower adoption of iPhones.

💡Credit Cards

Credit cards are a form of payment that allows consumers to borrow money to make purchases. The video points out that the low penetration of credit cards in India (only 1% of the population has them, according to the script) affects the usability of Apple's services like the App Store, which typically requires a credit card for transactions, thus limiting the accessibility of Apple's ecosystem.

💡Market Penetration

Market penetration refers to the extent to which a product or service has become established within its market. The video discusses Apple's low market penetration in India, with a mere 2.9% market share, and suggests that this could hinder future growth as more Indian consumers become familiar with and loyal to Android and its associated ecosystem.

Highlights

iPhones are less popular among Indians and in India compared to other regions.

iOS has an average global market share of 18.91%.

North America and Oceania have the highest iOS usage at 48%.

Europe follows with 24.06% iOS market share.

Asia and South America have around 10% iOS market share.

Africa's iOS market share is 7%, higher than India's 2.9%.

Price is a significant factor affecting iPhone sales in India.

Import duties and currency conversion make iPhones 30% more expensive in India than in the U.S.

Apple opened a factory in India in 2018 to produce low-end SE versions of iPhones.

Chinese brands like Xiaomi have aggressively taken over the Indian market with localized strategies.

Xiaomi has surpassed Samsung to become the leading smartphone seller in India.

Apple's high-end brand strategy is not resonating with the price-sensitive Indian market.

Apple's services like App Store and Apple Music are not as competitive in India as local alternatives.

Only 1% of the Indian population has credit cards, affecting the App Store's reach.

Apple's Siri struggles with Indian accents, impacting user experience.

Apple's rigid business model is not adapting well to India's diverse culture and language.

Apple's failure in India could have long-term effects as the country becomes the fastest-growing smartphone market.

Apple's market share in India is a mere 2.9%, suggesting a significant untapped potential.

Apple's competitors are effectively reaching rural customers through aggressive store openings.

Apple's potential customers in India are becoming familiar with Android, making it harder for Apple to penetrate the market.