World

Cook reveals why iPhones not selling in emerging markets like India

Punjab Tribune Bureau | January 30, 2019 11:08 AM

NEW DELHI: Although Apple CEO Tim Cook skipped mentioning India directly during the company's earnings call with analysts, he stressed that there are several factors why iPhone sales are not picking up in the emerging markets.

"The customers are holding on to their older iPhones a bit longer than in the past.

"When you pair this with the macroeconomic factors, particularly in emerging markets, it resulted in iPhone revenue that was down 15 per cent from last year," Cook told analysts late Tuesday.

"One of those factors, weak macro-conditions in some emerging markets, was significantly more severe than we originally foresaw, especially in Greater China. That challenge was compounded by quarterly iPhone upgrades that were lower than we anticipated," Cook explained.

Apple CEO said foreign exchange is another key factor behind the slow iPhone sales.

"The relative strength of the US dollar has made our products more expensive in many parts of the world.

"The foreign exchange issues amplified that difference in international markets, in particular, the emerging markets which tended to move much more significantly versus the dollar," he said.

According to him, subsidy is probably the bigger of the issues in the developed markets.

"Third is our battery replacement programme. For millions of customers, we made it inexpensive and efficient to replace the battery and hold onto their existing iPhones a bit longer," Cook explained.

Apple has already begun reducing the price of the iPhone for third-party distributors in China and may follow the same in India where the iPhone is considered very expensive.

In a recent interview to CNBC, Cook said India is an important market for him.

"It is a major focus. If you look at how we've done over the years, we've gone from, you know, $100, $200 million business to, last year, we hit - we exceeded $2 billion," he was quoted as saying.

"We'd like to put stores there. We would like some of the duties and so forth that are put on the products to go away. And we're working closely with the team there," he added.

The iPhone maker is seeking tax relief and other incentives from the government to begin assembling more handsets and open its branded stores, and its proposal to set up a manufacturing unit is also being evaluated.

According to Hong Kong-based Counterpoint Research, Apple's India shipments were 1.7 million in 2018, almost 50 per cent lower than the 2017 shipments of 3.2 million units.

"We can expect some kind of price correction going forward as Apple has given indications that they will look at pricing outside the US closely now," Tarun Pathak, Associate Director at Counterpoint, told IANS.

"India continues to be a critical market for Apple as the premium segment is likely to grow faster than the overall smartphone market," he added.

In a fillip to Cook's big future plans for the Indian market, Apple has appointed Ashish Chowdhary, Chief Customer Operations Officer at Nokia Networks, as its India operation head.

The decision to hire Chowdhary is a testament to the fact that Apple is aiming for a real long-term growth in a price-sensitive market where Apple is an aspirational brand and usually bought by those who have high spending power or can go for older generation phones for affordability.

Have something to say? Post your comment
Must Read
Smuggling through border cannot be fully stopped, says BGB
Smuggling through border cannot be fully stopped, says BGB
'Batla House': Nora Fatehi steals the show with recreated version of 'O Saki Saki'
'Batla House': Nora Fatehi steals the show with recreated version of 'O Saki Saki'
Kumar Keshav, the man behind success of Lucknow Metro
Kumar Keshav, the man behind success of Lucknow Metro
 DC Exhorts students to be Ambassadors of conserving the water table in District by participating Zealously in ‘Jal Shakti Abhiyan’
DC Exhorts students to be Ambassadors of conserving the water table in District by participating Zealously in ‘Jal Shakti Abhiyan’
Nutritious and Delicious Kiwifruit from Chile makes deeper inroads into Indian Market
Nutritious and Delicious Kiwifruit from Chile makes deeper inroads into Indian Market
Defence Min issues Rs 2000 cr tender for critical heavyweight torpedoes for submarines
Defence Min issues Rs 2000 cr tender for critical heavyweight torpedoes for submarines
I will come to India in another 24 hours: IMA founder Mansoor Khan
I will come to India in another 24 hours: IMA founder Mansoor Khan
Maharani The Kitchen offers you the Best Royal Cuisine in Delhi/NCR
Maharani The Kitchen offers you the Best Royal Cuisine in Delhi/NCR
Rohit Sharma feels cricket rules need 'serious look in'
Rohit Sharma feels cricket rules need 'serious look in'
I'm not a perfect role model, says Neymar
I'm not a perfect role model, says Neymar
No proposal under govt's consideration for special category status to Odisha: Anurag Thakur
No proposal under govt's consideration for special category status to Odisha: Anurag Thakur
Pro-Khalistani leaders continue to hold key positions in PSGPC
Pro-Khalistani leaders continue to hold key positions in PSGPC