Key Executives Quit, Sales Plummet as Apple’s India Strategy Unravels

256GB iPhone X Now Costs $1,700 in India After Tariff Hike Credit: The Verge
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Just a few years ago when Apple first set its sights on penetrating the untapped Indian market, Chief Executive Tim Cook was quoted using phrases like “very bullish” and “very optimistic” in reference to his company’s potential in the Asian country. With an estimated population of 1.3 billion and counting, Cook has even suggested that India could become the next China, which is now Apple’s second largest market by volume.

Sadly, by looking at some of the company’s latest developments, Apple’s outlook in India may be in a state of discord and decline now, as Bloomberg News reports the company has lost three pivotal executives on its Indian team — including its national sales and distribution chief, its head of commercial channels and mid-market business, and its head of telecom carrier sales.

Speaking to Bloomberg on condition of anonymity given the private nature of these revelations, at least one source with knowledge  confirmed that Apple’s India sales team is currently undergoing reorganization as a result of these developments.

What Went Wrong?

Today’s news comes amid Apple’s larger struggle to gain a firm grasp on the Indian market — a prospect that may have been plagued from the get-go, due primarily to the Middle-Eastern nation’s exorbitant import tariffs driving the cost of devices like iPhone through the roof, and placing them far out of reach, for most consumers.

Apple has for the most part encountered difficulty understanding the way things work in India, at least one source confirmed to Bloomberg, leaving the company’s sales team essentially “direction-less.” Michel Coulomb, who took over as head of Apple’s Indian operations back in December, 2017, has rich experience in carrier-led sales, the sources noted; however his team has been “slow to cultivate business relationships” in the market.

Further compounding the matter is that Apple has largely failed to build up rapport among Indian consumers, many of whom are iPhone deterred due to the handset’s high cost, especially with import tariffs tacked on. 

In India, Apple currently has a market share of around 2 percent, having sold just 3.2 million iPhones in all of 2017, according to the latest Counterpoint Research statistics.

In the first half of 2018, meanwhile, Apple sold fewer than a million iPhones in the country.

“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,” noted Counterpoint Research director, Neil Shah.

It appears that while Apple was initially bullish and optimistic about its prospects in the Indian market, sadly, the high cost of iPhones and associated tariffs has rendered them a true luxury for Indian consumers — most of who alternatively flock to much cheaper devices offered by companies like Samsung, Xiaomi, and Oppo.

What’s Next?

Apple currently produces older models like the iPhone 6s in India to help offset the import tariffs due on models produced elsewhere. And while the company may still find limited success with those models as it moves forward into a Face ID future, it’s clear that if Apple truly wants to succeed in India, it’s going to need to seriously realign its strategy.

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