While Apple focuses on China, everyone forgot about India

Summary:Apple's iPhone sales has grown by as much as 400 percent in just three months in India, but the Cupertino, Calif.-based company has already made clear that it won't make any compromises on a 'low-cost' smartphone.

India may be the world's second largest country by population with 1.21 billion residents, but China has been Apple's main focus in recent times, as the world's largest countries, thanks to its booming economic growth.

But in the last few months, Apple has seen between a 300-400 percent rise in iPhones sales in India, according to a report by The Economic Times. That may be where the company's next cash cow lies, but the company has taken a back-seat approach on the emerging market.

According to the report, the company is "in the middle of an extensive advertising and marketing campaign for its iPhone," which could be the start of a "sustained effort by Apple" in a bid to compete with Samsung in the region. In the process, Apple has reportedly increased its staff levels in the country by five-fold. 

It seems to contradict Apple chief executive Tim Cook's comments during the company's third-quarter earnings last year. In reply to an analyst who wanted to know why Apple was not as successful as it could be in the Indian market, Cook said that he "believe[s] Apple has some higher potential in the intermediate term in some other countries."

However, he did note that, "this doesn't mean we're not putting emphasis in India."

Apple's iPhone gain uptake in the Indian market, where Samsung rules the roost and dominates the market, has helped the company significantly, amid slowing growth in the U.S. and European markets. 

While the Cupertino, Calif.-based company has in recent years on the most part seemingly ignored India as one of the BRIC nations of economic developing superpowers—which includes Brazil, Russia, India and China—the iPhone maker has instead focusing on expanding its retail presence in mainland China

To expand its market share and to continue on the iPhone gravy train, Apple has to take one of the BRIC nations by storm, and while China is doing well—around 12-15 percent of Apple's total revenue, according to Q1 figures —India is catching up, and rapidly.

Recent latest comScore figures suggest that smartphone penetration rates in developed nations—notably the U.S. market— stands at more than 50 percent , or half the population. In India, the figure stands at just 10 percent.

But that massive growth in iPhone sales comes from a tiny proportion of the population—maybe one or two hundred million people. It sounds like a lot, but in a huge market of more than one billion residents, it's merely a drop in the ocean.

This poses a problem for Apple. It can either 'cheapen' the iPhone by manufacturing the device with lower specifications, or lower its profit margins on the device and sell the existing iPhone 4, 4S or 5 models—or some combination thereof—and therefore vastly reduce the device's retail price. 

Apple will more likely instead target that 10 percent of the Indian market aggressively, rather than reintroducing the iPhone 3G, or 3GS, into the developing market, which would pose a fragmentation risk to the wider iPhone market.

Market share grabbing is not a sprint, it's a marathon.

Topics: India, iPhone

About

Zack Whittaker writes for ZDNet, CNET, and CBS News. He is based in New York City.

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