Apple Inc, the world’s largest smartphone maker, is having trouble selling iPhones in India, a market with 602 million active subscribers.
Apple, which is to introduce a new version of its iPhone today, ships fewer handsets to the world’s second-largest mobile-phone market than it does to Norway. Nokia Oyj and Research In Motion Ltd (RIM) sell more devices in India, where smartphone shipments are forecast to grow almost 70 percent a year until 2015, helping mitigate their market-share losses in the US and Europe.
Sales for the world’s biggest company by market value are hindered because Indian wireless carriers, which started third-generation networks this year, have yet to offer nationwide services fast enough to take advantage of iPhone features, said Gus Papageorgiou, an analyst at Scotia Capital Inc in Toronto.
Photo: Bloomberg
“Networks in India are just not conducive for Apple — 3G networks aren’t quite where they are in Western Europe and North America,” he said. “RIM got the right product, the right timing, the right app.”
Apple shipped 62,043 iPhones to India in the quarter ending June 30, or fewer than to Norway, Belgium or Israel, according to estimates by US-based researcher IDC.
Apple accounted for 2.6 percent of India’s smartphone shipments in the quarter ended June 30, trailing RIM’s 15 percent, Samsung’s 21 percent and Nokia’s 46 percent, IDC estimates show.
“The iPhone only really works when you have Wi-Fi,” said Kshma Shah, a 25-year-old interior designer in Mumbai. “3G has barely started in India and on 2G you just can’t have the same experience.”
The world’s largest maker of tablet computers also shipped about 21,150 iPads to India in the same period, or 0.2 percent of its global total, according to IDC.
RIM’s BlackBerry Messenger instant-messaging service is popular because it was one of the first and it functions well on networks a generation behind the speeds offered in the US and Europe, Papageorgiou said.
“Only a few of my friends have iPhones,” said Mahafareenn Sarkari, a 25-year-old dance instructor in Mumbai. “BlackBerry is where everybody is, so it made sense for me to be on it, too.”
RIM, which entered India in 2004, plans to extend its lead over Apple after expanding distribution to 80 cities from 15 starting last year, said Krishnadeep Baruah, director of marketing for Waterloo, Canada-based RIM in India. Meanwhile, Nokia has more than 200,000 outlets in India and offers 13 smartphone models, Vilsha Kapoor of New Delhi-based Six Degrees PR, hired by Nokia to handle public relations, said in an e-mail.
Apple products are not as accessible in India because users cannot buy iPhones, iPads and iTunes songs from company stores or its Web site. Apple sells through licensed resellers, including a Reliance Industries Ltd subsidiary and Tata Group’s Croma.
“Apple continues to invest in India as a growing market for the company,” Alan Hely, a London-based spokesman for Apple, said in an e-mailed response.
Apple may be relying more on word-of-mouth among India’s wealthy, said Harish Bijoor, who runs his own brand consulting firm in Bangalore.
“They don’t see a big enough market for their products to make it worthwhile,” Bijoor said. “They’ve barely done any advertising. It’s pathetic, really.”
Cost is also an issue in a country where the World Bank estimates that about 900 million people live on less than US$2 a day.
The cheapest iPhone 4 costs US$705 at Reliance’s iStore, while the cheapest iPad 2 sells for about US$603. In Apple’s US online store, the iPhone 4 starts at US$199 with an AT&T Inc contract and the iPad starts at US$499.
BlackBerrys under US$200 made up 40 percent of their shipments in India in the quarter ended June 30, said T.Z. Wong, an analyst for IDC.
“I don’t think Apple is a brand for the masses,” said Ajit Joshi, managing director of Croma, which also sells other brands besides Apple. “It’s a brand for the classes.”
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