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Apple signals emerging-market rethink with India push

AFR | Feb. 25, 2013
BlackBerry faces new competition from Apple in India, one of its most loyal markets, that has long had a minimal presence in the country.

Samsung Electronics dominates Indian smartphone sales with a 40 per cent share, thanks to its wide portfolio of Android devices priced as low as $US110. The market has also been flooded by cheaper Android phones from local brands such as Micromax and Lava.

Most smartphones sold in India are much cheaper than the iPhone, said Gartner analyst Anshul Gupta.

"Where the masses are - there, Apple still has a gap."


Apple helped create the smartphone industry with the iPhone in 2007, but last year lost its lead globally to Samsung whose free Android software is especially attractive in Asia.

Many in Silicon Valley and Wall Street believe the surest way to penetrate lower-income Asian markets would be with a cheaper iPhone, as has been widely reported but never confirmed. The risk is that a cheap iPhone would cannibalise demand for the premium version and eat into Apple's peerless margins.

The new monthly payment plan in India goes a long way to expanding the potential market, said Chakrawarti.

"The Apple campaign is not meant for really the regular top-end customer, it is meant to upgrade the 10,000-12,000 handset guy to 45,000 rupees," he said.

Apple's main focus for expansion in Asia has been Greater China, including Taiwan and Hong Kong, where revenue grew 60 percent last quarter to $US7.3 billion.

Asked last year why Apple had not been as successful in India, chief executive Tim Cook said its business in India was growing but the group remained more focused on other markets.

"I love India, but I believe that Apple has some higher potential in the intermediate term in some other countries," Cook said. "The multi-layer distribution there really adds to the cost of getting products to market," he said at the time.

Apple, which has partly addressed that by adding distributors, did not respond to an email seeking comment.

Ingram Micro, one of its new distributors, also declined comment. Executives at Redington (India) Ltd, the other distributor, could not immediately be reached.

BlackBerry, which has seen its global market share shrivel to 3.4 per cent from 20 per cent over the past three years, is making what is seen as a last-ditch effort to save itself with the BB10 series.

The high-end BlackBerry Z10 to be launched in India on Monday is expected to be priced not far from the 45,500 rupees price tag for an iPhone 5 with 16 gigabytes of memory. Samsung's Galaxy S3 and Galaxy Note 2, Nokia's Lumia 920 and two HTC Corp models are the main iPhone rivals.

Until last year, Blackberry was the No. 3 smartphone brand in India with market share of more than 10 percent, thanks to a push into the consumer segment with lower-priced phones. Last quarter its share fell to about 5 percent, putting it in fifth place, according to Canalys. Apple was sixth.


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