Apple’s prohibitory pricing has ensured the brand remains an outsider in India’s lucrative smartphone market. Yet, the brand is moving to hike the prices of its iPhones some more.
Apple’s love affair with the Indian smartphone market is a well-documented one. Over the years, the Cupertino-based smartphone giant has tried a number of tricks to gain a strong foothold in the fastest growing smartphone in the world. The company has tried multiple strategies, including setting up manufacturing plants in India and even slashed prices – albeit not too much — to lure the Indian buyers into accepting it.
Yet, as things stand, Apple remains an outsider in a market that has readily accepted foreign brands like Samsung, Xiaomi and Huawei. And one of the main reasons for it is Apple’s prohibitory pricing of its products. Despite all the talk about making Apple’s products more accessible to the aspirational Indian buyer, the reality is that our country remains one of the most expensive places to buy Apple smartphones in. Plus add to it the fact that India is one of the very few markets around the globe in which Apple sells its otherwise discontinued iPhones at exorbitant prices.
One would assume that Apple would eventually learn from the failure of these strategies and start treating the Indian market with the respect that it deserves. But it appears this is just wishful thinking. As per a report by the Economic Times, Apple is ready to defy all logic by increasing iPhone prices and discontinue the sale of the iPhone 6 and iPhone 6 Plus — its entry-level iPhones in the country.
The report explains that this decision is part of an exercise by Apple to reinforce its position as an uber-premium brand in the country. ET further goes on to add an Apple executive who tries explain the move. He said, “It wants to reinforce the brand’s ‘premiumness’ in the Indian market and increase average selling prices”. But that’s not all. In its bid to assert this “premiumness” Apple is also ready to pull stocks of its phones from smaller stores that sell less than 35 iPhones a month or are smaller than 350-400 sqft in size.
Bringing us to only one conclusion: Apple has completely lost the plot.
If the report turns out to be true, by taking stocks back from smaller stores Apple is pretty much going to end whatever little presence it has in tier 2 cities where the brand enjoys a strong following based on its aspirational value. If Apple goes ahead with this plan, it will not only create more hurdles for buyers but also contribute to gradually decreasing its presence in huge sections of the country.
As opposed to what Apple likes to believe, the only thing that’s holding Apple back Apple in the country right now is its prohibitory pricing which is keeping away a huge chunk of the middle — and even upper middle class — buyers from thinking about getting an Apple-branded phone.
And about increasing the “premiumness” of the brand, Apple to date remains arguably the most premium smartphone brand in the country. No amount of increasing the price of their phones can help improve them on this front. Rather, a strategy such as this could end up alienating buyers from the brand some more and leave it on the outskirts of a hugely lucrative market that in the coming days is expected to shape the future of the industry.
