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This story is from February 8, 2013

Apple gets aggressive in India, sales rise 400% in 3 months

Apple appears to be vying for the attention of the affluent Indian smartphone buyer who has been cultivated assiduously by rival Samsung for many years.
Apple gets aggressive in India, sales rise 400% in 3 months
Apple appears to be vying for the attention of the affluent Indian smartphone buyer who has been cultivated assiduously by rival Samsung for many years.
(This story originally appeared in on Feb 8, 2013)
BANGALORE: Apple, 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.

It 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.
"Apple is doing what it did in China three or four years ago. They studied the market, learned consumer needs and suddenly went aggressive," said Jayanth Kolla, founder and partner at Convergence Catalyst, a telecom research firm. "From having about 30 people here six months ago, Apple India is 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.

Apple, founded by the late Steve Jobs who came to India in search of spiritual salvation, has had only a marginal presence in the country. It has a negligible share of the local smartphone market, where Samsung is the clear leader. The company, which shuttered a technology support centre in the country a few years ago, declined comment for the report.
Last month, Redington, which handles nearly 70% of Apple's India sales, surprised analysts with better-than-expected revenue from iPhone shipments — a little over Rs 400 crore in the December quarter. 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.
Brokerage Nomura reported that Redington's costs in the December quarter jumped 20% from the preceding three months, driven mostly by iPhone-related advertisements. "It is a joint effort by Apple and its distributors. While other brands have an in-house team for advertisements, Apple does that through its partners," said JK Jaishankar, managing director of Ingram Micro India, one of the largest distributors of electronic merchandise.
Beyond the brand positioning and visibility, Apple is also trying to make its products, although expensive, accessible to a broader base of consumers. Its iPhone 5 sells in India for Rs 45,000 and competes with Samsung's Galaxy S III, the Samsung Note II (which run on the Android operating system) and Nokia Lumia 920 (which ships with Windows 8). Some 251 million phones are expected to be sold in India this year.
"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.
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