iPhone Sales Flop Hard In India As Apple Races To Replace Fleeing Execs
Apple makes a killing from its iPhone devices, which is the biggest reason why the company's market capitalization is right around $940 billion. But in India, one of the fastest-growing smartphone markets, Apple has a tougher time selling iPhone handsets. Sales are comparatively poor in India, and it doesn't help that Apple is dealing with high-level executives calling it quits.
It's not that consumers in India have no interest in iPhone devices. The problem for Apple is price. Apple does not manufacturer its latest iPhone devices domestically in India, and so its top models are subject to tariffs that drive up the price, compared to cheaper handsets from companies like Samsung (Apple's biggest rival) and Xiaomi.
Since imported gadgets have higher price tags because of high tariffs, Apple focuses on selling older iPhone models. This strategy hasn't been working very well for Apple, which sold just 3.2 million iPhone devices in India last year, according to data from Counterpoint Research. In the first half of 2018, the same firm estimates that Apple has sold fewer than 1 million iPhones.
"iPhone India sales were weak in the first half of 2018 and, even if they show a big jump in the traditionally strong second half, Apple will still fall short of last year," Neil Shah, a research director with Counterpoint, told Bloomberg.
On top of dealing with disappointing sales, it's reported that Apple lost three important executives in India, including its national sales and distribution boss, the head of its commercial channels and mid-market business, and the chief of telecom carrier sales. Apple's sales team in India is now in the midst of a restructuring effort.
Part of what's interesting about Apple's struggles in India is that company CEO Tim Cook is upbeat about the sales potential. According to Cook, India could be the next China, which is Apple's second largest market at the moment. It seems that Cook might be overestimating the willingness of consumers in India to pay inflated price tags for imported iPhones.