In late January we asked the question: Is There More to Apple's Move to Sell 28 Cent Songs in India? Well, according to a new report out of Bangalore India today, Apple has more than tripled their sales in the last quarter. Apple, according to the report, which has for long ignored India, appears to be vying for the attention of the affluent Indian smartphone buyer who has been cultivated assiduously by rival Samsung for many years. The increased level of interest in India is happening in the backdrop of concern among Apple's investors that the iconic company may have hit a plateau as smartphone penetration levels saturate in developed markets.
The report states that Apple is in the middle of an extensive advertising and marketing campaign for its iPhone, pivoting away from a strategy that relied on tie-ups with mobile operators. This, analysts said, could be the beginning of a sustained effort by Apple, which also makes the iPad tablet, to compete in the top end of the smartphone market.
Jayanth Kolla, founder and partner at Convergence Catalyst, a telecom research firm stated that "Apple is doing what it did in China three or four years ago. They studied the market, learned consumer needs and suddenly went aggressive." He added that Apple India has gone from "having about 30 people here six months ago, to now about 150-people strong."
Market researcher IDC estimates that over the past three months, sales of Apple devices, especially iPhones, have gone up by 3-4 times. Part of the success has to do with opting for an open distribution model, signing up with distributors Redington and Ingram Micro. "Apple is aggressively looking at the Asia-Pacific market with strong focus on China and India," said Manasi Yadav, a senior analyst at IDC India.
More than 700 million smartphones were shipped in 2012, and in the final quarter of the year Samsung cornered 29% of the market compared with Apple's 22%. Smartphone penetration rates in developed economies stand at over 50%, compared with less than 10% in India. So the opportunity and upside for Apple is potentially huge.
Last month, Redington, which handles nearly 70% of Apple's India sales, surprised analysts with better-than-expected revenue from iPhone shipments. Redington, which declined comment for the report, told analysts during an earnings call that Apple reimbursed it the cost of full-page newspaper advertisements through higher margins on iPhones.
"Apple understands that instalments-based payment is an effective tool for bridging the gap between value and affordability. We started the EMI scheme with Apple early this year and witnessed a three-fold increase in sales," said Himanshu Chakrawarti, CEO of TheMobileStore, a national retail chain that operates 1,000 outlets in 150 cities.
Despite its recent marketing efforts, Apple will struggle for volume growth and market share because of its limited product range, experts said. "Aggressive marketing and a push with distributors can increase brand visibility and connect, but they would need a broader portfolio for increasing market share," said Anshul Gupta, principal research analyst at Gartner. That's a point that has been echoing since the beginning of the year.
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