As early as March 2013 Apple made it clear that they wanted to triple their retail footprint in India. Later that year, news emerged that Apple was working with more local retailers to open up new retail spaces like "shop-in-shop" or "store-in-store" displays that are found today at Best Buy and other stores throughout Canada and the U.S. To push that initiative, Apple pushed aggressively with iPhone 4S pricing to accelerate iPhone sales in India. Apple recognizes that India is going to be a key future market and has been lobbying the Indian government for years to allow them to open their own Apple Stores and buildings like they have around the world. However, thus far that endeavor has been nothing more than an exercise of futility. Today, news from India states that Apple is at it again with yet another marketing strategy for this key market.
The Times of India is reporting today that Apple plans to go local with a vengeance, setting up small, neighbourhood shops in big cities and tier II markets, in a bid to get closer to potential buyers as it pushes ahead with an India-specific strategy aimed at trying to grab market share from dominant rival Samsung.
The shops will be set up by Apple distributors Redington and Ingram Micro besides existing trade partners and follows the revival of the iPhone 4 for sale in India and other emerging markets, which gave buyers who covet the brand the option of a phone that costs much less than latest models. Apple has also directly approached some trade partners and retailers regarding the setting up of the neighbourhood stores.
Samsung is widely present in the Indian retail market place, offering smartphone and tablets through more than 1,000 Smartphone Cafes. Apple is late to the game, only having seriously focused on India in the last two years but having since then given the local management a freer hand. Apple India has sought to push phones and tablets through exchange and finance programmes, besides reintroducing the iPhone 4, which is defunct elsewhere.
Apple wants to focus more on its entry-level models in these stores such as iPhone 4, iPhone 4s, iPad mini and iPad 2. A senior executive of a leading trade partner of Apple stated that Apple "feels these products are also attractively priced over competitors such as Samsung and Sony, and hence, being closer to the consumer will help to increase the conversion rate.
The report noted that Apple had around 2% market share of the Indian smartphone market in the October-December 2013 quarter, far behind market leader Samsung at 32% share and Micromax at 21%, according to market tracker Canalys.
Apple's value share, however, is higher due to the price of its phones, with the iPhone 5c starting at 41,900 Indian Rupees or $685US. That's why reintroducing the iPhone 4, at a price that could go as low as 21,000 Rupees or $343US, made sense for the Indian market.
During Apple's financial conference call Tim Cook noted that the iPhone 5c accounted for a smaller percentage of total iPhone sales than expected. The iPhone 5c was supposedly aimed at emerging markets like India. However, Apple has gone back to the drawing board and actually reintroduced the iPhone 4 just for the Indian market. Apple aggressively introduced that in February and also reintroduced the marketing concept they used to sell the original Macintosh: The Test Drive.
It's clear by Apple's shifting strategies and product mix over the past year or two that they're trying to understand this very complex emerging market that refuses to allow them to open their own stores to better help them connect with the India consumer.
Apple's latest marketing experiments could be part of a test to understand how they should be refocusing the iPhone 5c or its equivalent in the coming months or years ahead. Whether they reinvent the iPhone 5c for markets like India or just continue to address this market with older iPhone models is unknown at this time. But it's clear that Apple is still struggling to find their footing in India so that they could better serve the needs of its consumers and Apple fans across the country. They'll crack it. It's just going to take a little more time.