After Distribution Push, iPhone Sees Strong Growth in India

India iPhone Market Share

Following efforts last year to increase iPhone sales in India, Apple’s smartphone saw significant gains in both revenue and market share in the country during the fourth quarter of 2012, according to IDC data reported by The Economic Times Monday. Apple’s smartphone revenue share rose sharply during the fourth quarter, from 3.9 percent to 15.6 percent, moving it ahead of the reinvented BlackBerry and into second place behind Samsung, while its market share increased nearly four-fold from the previous quarter.

The data on the iPhone’s performance in India is from the IDC Asia-Pacific Mobile Phone Tracker. While The Economic Times has the overall results today, the full IDC report and analysis will be released “later this week.”

Despite the iPhone’s growth, the device is still in fifth place overall in terms of quarterly market share. Samsung, Micromax, Sony, and Nokia all sold more phones during the quarter in a country in which the iPhone has thus far failed to capture to the same extent as other markets.

Despite significantly fewer shipments than its competitors, Apple’s premium-priced product still allowed the company to capture the second-highest revenue share. Samsung took 38.8 percent of the Indian market’s revenue in the fourth quarter, followed by Apple at 15.6 percent, Sony (9.4 percent), Nokia (7.3 percent), and Micromax (6.5 percent).

Notably, market leader Samsung saw its revenue share fall nearly 12 percent on the quarter due primarily to what analysts classify as Apple’s new aggression in the Indian market.

“Apple’s sudden jump to become the second-largest player by revenue in smartphones is a surprise as has been the four-fold increase in shipment of iPhones to India in the last quarter,” IDC India’s Senior Market Analyst Manasi Yadav stated in the company’s report. “We expect equally high numbers for the current quarter as well.”

Some of Apple’s competitors responded to the drastic change in the smartphone market. “Apple has deep pockets and we have to take its sudden aggression seriously," BlackBerry India Managing Director Sunil Dutt told The Economic Times. "However, it still has a long path to travel,” he added.

Samsung, which is locked in a rancorous legal and market battle with Apple around the world, was less impressed with Apple’s growth in the country. Samsung Mobile VP Asim Warsi was “unfazed” by the news, reminding reporters that the company’s Galaxy Note 2 was the top selling model in the country and that Samsung is merely “looking at consolidating [its] market leadership.”

Apple’s iPhone has seen a relatively slow adoption in India due primarily to issues of distribution and cost. Initially, Apple limited distribution to select mobile carriers, a decision that resulted in an accusation of anticompetitive practices in 2010. Last year, the company expanded the iPhone’s distribution to several retail chains, greatly expanding the product’s reach.

Still, price remains a concern for Apple in a nation that is relatively poor. The average iPhone model sold in India costs ₨ 45,550 (approximately US$840), with the cheapest model, an 8GB iPhone 4, selling for ₨ 26,500 ($490). These prices compare unfavorably to Samsung’s Galaxy line, which range from ₨ 5,990 to ₨ 35,599 ($110 to $660).

To address these pricing concerns, Apple’s retail partners have begun to aggressively offer equated monthly installments (EMIs), helping Indian customers afford an iPhone purchase with the use of low monthly payments. Persistent rumors also point to a future low-cost iPhone, which may help Apple capture additional market share in India.