Apple CEO loves India but doesnt see much business here
NEW DELHI: In a conference call with investors and analysts on July 24, Apple CEO Tim Cook said that he loved India but there was little business opportunity in the country to sell the company's products.
"I love India, but I believe Apple has some higher potential in the intermediate term in some other countries. This doesn't mean we're not putting emphasis in India. We have a business there and it's growing but my own perspective is that in the intermediate term there will be larger opportunities outside (the country)," he said.
Cook was replying to a question from an analyst who wanted to know why Apple was not more successful in India. The conference call with investors was hosted after Apple declared the results for the quarter 3 of its financial year. The call was live streamed.
Cook added that the distribution channel in India's was also a issue. "The multi-layered distribution (In India) really adds to the cost of getting products to market," he said.
While he did not elaborate the distribution difficulties the company might be facing, the company had usually preferred to sell iPhone, its flagship product and a cash cow at the moment, through partnerships with telecom operators. The operators subsidize the device for end users and recoup the money by binding customer to use their service for a year or two. But the 'contract model' for smartphone in India is virtually non-existent, forcing smartphone makers to compete directly with each other in the extremely price-sensitive market.
Cook might also be alluding to the existing FDI norms in retail that might not be too conducive to companies dealing with consumer goods. Also, Apple prefers to own and control its supply chain and product distribution.
In comparison, Cook sounded very excited about Apple's chances in China. "We've been very focused on China, because we see it as an enormous opportunity for us," he said.
While Apple has a relatively small but extremely vocal group of fans in India, its market share is still small. Analysts believe that smartphone market in India is dominated by Samsung, which has a market share of around 45%. Nokia and RIM, which makes BlackBerry phones, are two other companies that are strong players in this market.
Sources put Apple's market share in the smartphone market in India in single digits. In December last year, IDC, a research agency, found that Android had a 42% market share in the smartphone market. In comparison, iOS, which powers iPhone, had a share of 3%.
In the tablet market, the situation is believed to be somewhat better for Apple. But unlike in several other markets where the iPad has a huge lead over the competitors, in India Apple is one of the players in the market where Samsung, RIM and a host of other tablet makers are fighting for the lion's share.
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