The iPhone was a huge success in the United States. To this day, Apple still holds a large portion of the United States’ smartphone market. In terms of smartphone market size, China may be the second biggest market next to the US. It seems that Apple made the right move as the iPhone also holds a large share of China's mobile market.
The next target on the global map is India. Unfortunately, critics are claiming that Apple may not be able to crack India’s smartphone market. In fact, the iPhone product only holds a mere 3% of the total smartphone market in India.
Nevertheless, India is a huge market and Apple is still betting that they could turn India into a nation of iPhone users. Just like in China, India has a growing upper class and middle class, and this is one of the reasons why they think the nation is ready for the expensive device. On the other hand, there are a lot of critics claiming that Apple may not be able to replicate their China success in India.
According to Mizuho, a financial group, Apple's biggest challenge is overcoming the fact that iPhones are simply too expensive when compared to other Indian goods.
According to an analyst from Mizuho, one iPhone is equivalent to a month's rent or five round-trip, cross-country tickets.
Mizuho also added that aside from the affordability issue, other key factors may include:
The tech issue - Currently, India lags approximately 7 to 10 years when compared to China's smartphone technology.
Idiosyncratic factors - China's market features a peculiar affinity for large screen devices, which also helped the rapid adoption of iPhone 6s in the country. Such a factor may not be applicable in India.
Limitations – A lot of regions in India simply may not have the satellite coverage to support Apple products.
For many Indians, iPhones are excruciatingly expensive. In fact, for Indians who decide to purchase an iPhone, they usually go for the iPhone 5s (which was launched in the United States in 2013).
Nevertheless, Apple is still doing what it can to try to penetrate the Indian market. For example, Apple already has a factory that’s strategically placed in Bangalore, India. The factory is largely producing iPhone SE models. With a factory in India, Apple is able to bypass some of the taxes, which translates to a lower unit price. Furthermore, Apple is aggressively hiring "affordability managers." These managers are given the task of negotiating an affordable loan, on behalf of the customer, with the banks.
While Apple's marketing success may look dim, there's still a chance that it might happen. One factor that Apple has is its strong brand presence in India. This is possibly because of the high price. Furthermore, India is still a country that places a big deal on status. Owning an iPhone in India translates to being a successful individual and with it comes a higher public status.
While it's possible that Apple may be able to penetrate the Indian market in the future, there is only one thing that is for sure - with a market hold of only 3%, Apple still has a long uphill battle ahead of itself.
