Discover more from Learning by Proxy with Vivek Srinivasan
Apple and India
Sometimes, the only thing that is left for you to do is go all out and put yourself out there. Such is the case with what Apple is doing in India.
The company has traditionally been very conservative with advertising in India and left it to the die-hard fans to show up at the store to purchase their devices. That was all fine up until the smartphones market in USA began to saturate. Once the growth pace in the developed markets began to slow, it was necessary to start tapping China and India. The Chinese case is rather settled, given that the China Mobile deal is an open secret. The only other large market left to dominate is: India.
The number of Apple advertisements in India has shot through the roof after the launch of the 5s and 5c. As in the US, they are primarily advertising the 5c, but I get to see at least 5 spots everyday in some channel or the other. Given that I probably spend a couple of hours everyday watching TV, I am sure that they are booking a huge number of spots. I have never witnessed as many Apple Ads in India. Never, not for any product. Couple this with fact that this was the first time Apple held launch events in 5 different cities in India, on the 1st November, for the iPhone; shows that Apple is taking India very seriously.
The religious Apple fans lined the malls to pick up their iPhones. According to reports I have read, about 30,000 iPhones were sold on the launch day across India. This might look like a far cry from the 9 Million that sold on the opening weekend, so let me put that in perspective. Apple does not have an online store in India, so the sales were restricted by the quantum of supply brought in. Last year during the April-June quarter, Apple sold 200,000 units of iPhone and that was a 400% jump on the year before. (All numbers are from various media reports, may not be completely accurate.) What may be more important to note here is that, the jump in that quarter came on the back of a new distribution model, aggressive exchange and EMI schemes that were introduced by Apple and most of the units sold at the time were iPhone 4.
At the moment, Apple is selling 5s, the top of the line device, with higher margins in India. And as it is across the world, the demand for iPhone 5s is much higher than that of 5c. This is extremely good news for the Cupertino based company. Add to this the fact that for the first time iPhone is going to be available on contract in India through Reliance Communications (R-Com) augurs very well for Apple. The deal with R-Com is done and the iPhone 5s and 5c are both going to be available for free on a 2-year contract (I do not think Apple has issued any stock to R-Com because of the hardship they are facing in meeting the western demand during the crucial Holiday period, they just have a form on their site at the moment). As per the Ads published by Reliance, iPhone 5s is going to be available for Rs. 3,000 ($50) a month, and the 5c for Rs. 2600 ($44). Unlimited 3G, Unlimited Call and Unlimited Roaming! In my opinion, this should cause a huge spike in sales of the iPhone and should improve the fortunes of Reliance considerably. Also, if this gamble by Reliance pays off, the rest of the operators in India will queue up to request Apple for a similar structure. This will results in Millions more in customers for Apple and also Millions who would get on the upgrade cycle as is the case in US.
All this makes for a strong case for Apple to engage in the advertising binge. I am 90% certain that the Reliance deal is going to be a huge hit. It is similar to the structure that they offered for the EMI scheme, only this time an operator stands to benefit.
Only time will really tell, how this all plays out for Apple, though it all looks really good!