Apple Maps Pricing-Versus-Branding Strategy to Gain Market Share in India

What makes you look cool and “makes a social statement” in India? An Apple iPhone, of course. But the “cool” factor comes at a cost: 71,000 rupees or about $1,180 for an entry-level unlocked iPhone. Apple has made steps to conquer the world’s biggest smartphone market, India, that counts 800 million active users (via The New York Times).

In 2013, Apple wakened to the potential of the world’s fastest-growing smartphone market. India also happens to be the second-largest mobile market, with 800 million active users. “Apple sees that the market is at a takeoff point. Sales numbers could get serious within a year or two,” said Anshul Gupta, a Mumbai-based principal analyst for mobile devices at the research firm Gartner. Apple’s shipments have doubled from 2012 and will surpass a million phones in 2013, Mr. Gupta said.

In fact, India has recorded an incredible growth last year: according to IDC’s recent numbers, the smartphone market has grown by 229% year-over-year in the third quarter of 2013, and the market research company projects that shipments will exceed 129 million by 2015.

So how does the Indian smartphone market look? With 80% of the smartphones being sold at between the $70 and $200 range, it cannot afford to be fringe player. So, to attract interested buyers, and increase sales and market share, Apple has offered a number of incentives besides a payment plan that allows anyone to buy an iPhone with no-interest monthly payments, called equated monthly installments. Its move came to balance the fact that the cheapest iPhone costs $525 in India.

With such incentives Apple hopes to change its position in the local smartphone market, where Samsung controls 33%, and Micromax has 17%. Both manufacturers offer more affordable smartphones than the iPhone.

“I’ve used Android phones forever, but the iPhone is hardier and makes a social statement,” said Mr. Sathyendra, whose new phone has become a conversation opener with clients. “I think I look, not wow, but cool and corporate,” he said.

But Micromax is invading Apple’s territory, the premium segment, as it aims high, to change the tonality and cool factor of the Cupertino company. In a country where the cool and corporate look is associated with Apple, it will be hard to compete with the company’s new pricing-versus-branding sales strategy, though.