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Apple to take a 'neighborhood' approach in India iPhone sales?
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Mar 11, 2014, 10:28 PM
 
A new report on Tuesday highlights a potential new approach for Apple in India -- a market where the smartphone giant has been struggling -- by combining its usual high-end approach in premium stores and resellers with a new "neighborhood shop" franchise of stores that would focus on selling "entry-level" devices -- the iPhone 4 (still available in India), the iPhone 4S, the iPad mini and the full-size iPad 2.

The report from The Economic Times of India says Apple will work with local distributors in large cities and "tier II" markets to implement the plan, which aims to go head-to-head with Samsung's mid-range and older smartphones like the Galaxy SIII. The shops will reportedly be very small by Apple standards -- 400 to 600 square feet -- and focus on iPhones, iPads and iPods alongside entry-level Mac products and accessories.

An unnamed senior executive at a partner firm with Apple in the new venture said that the stores are aimed at the "sub-30,000 [rupee]" market (referring to monthly income, which would be around $500 US) and catering to the company's current "largest-selling products in India." Apple will reportedly place the smaller stores in affluent areas and places heavily populated by young people, for example near academic institutions, and areas with high smartphone penetration.



Apple currently has about two percent of the Indian smartphone market, compared to Samsung with 32 percent. As with other markets, Apple takes a considerably higher share of the profit in the smartphone market there, but is very keen to improve its visibility in the market. India, with a population of 1.3 billion, is a very diverse region economically, with an average annual income of $4,200 (in purchasing power parity). The country's mobile device market is still heavily tilted towards "feature" cellphones rather than smartphones, but as with other developing nations that trend is rapidly reversing.

Rumors have suggested that Apple will formally re-introduce the popular iPhone 4 in India and possibly other markets as a pre-paid device. Possible pricing has been speculated to be around 22,000 rupees, roughly $360 US. By comparison, the iPhone 5c in India sells for nearly 42,000 rupees ($690 US).
     
   
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