Apple talks big about India, but its revenues are tanking

Want to get more information about 1 dollars in rupees today? Read this article now: Apple talks big about India, but its revenues are tanking

This device is unable to play the requested video.

Apple CEO Tim Cook loves talking about the India potential. In 2016, he made what was an Apple chief's first visit to the country, and this March, on an analyst earnings call, he talked about the India potential in glowing, optimistic terms: "India is the third-largest smartphone market in the world. There's huge opportunities there for us, and we have extremely low share in that market overall... we're putting a lot of energy there," he said.

Is he though? The fact is, Apple's track record in India over the past few years is a real head-scratcher. Research outfit Counterpoint has toldReuters that sales could drop by as much as 33 percent, from 2017-18's (year-ended March) estimated three million units to two million in 2018-19, the first such slump in four years, thanks to shipments of less than one million units in the first half of this year. It could very well be the company's worst performance in India to date.

Quite clearly, Indians aren't digging Apple's phones as much as it thought they would. All-in-all, apparently Apple will see 10 percent less users (nine million them) of its iPhone this year in total, an insignificant number when compared to Android's 436 million users in the country. According to research firm IDC, the company's market share will almost certainly halve to 2.5 percent this year. This doesn't exactly reflect a company going gangbusters in what happens to be hottest smartphone market in the world today -- where companies like Xiaomi are flogging handsets at a 25-percent growth rate per quarter and posting staggering revenue jumps in excess of 150 percent year on year.

It's not that the company isn't making any money there, and herein lies the paradox behind Apple's India numbers. The Cupertino, Calif.-based company has never made more money in India as it did this year. While revenues grew 12 percent to Rs 13,097 crore (around $2 billion at exchange rate of 65 Rupees to the dollar) in 2017-18 (ended-March), the company's net profits doubled from Rs 373 crore to Rs 896 crore ( around $14 million) during the same period.

These figures seem even more absurd when juxtaposed with one of China's best-selling brands in India, the value-for-money, startup-turned-behemoth that is Xiaomi. Xiaomi's revenues are almost double that of Apple's at Rs 23,000 crore in Indian Rupees (around $3.5 billion), yet Apple made almost three times the Chinese outfit's profits of Rs 293 crore.

Of course, this isn't an India-specific phenomenon, as Quartzpoints out. Apple may occupy just 20 percent of the smartphone market globally, but it generates an astonishing 90 percent of the industry's profits. But this doesn't explain why Apple has been an underwhelming performer.

The real problem behind Apple's growing pains in India lie within its stance toward the Indian eco-system that some wouldn't find fault with. Firstly, despite all the hype about India's rising middle class and its spending power, Per Capita income in the country (in nominal terms) is a measly $1,715 versus that of China's at $8,234.

In other words, an average Chinese person makes four times more income than an Indian (although that reality is tempered a little when Purchasing Power Parity calculations are introduced, whittling that ratio down to 2.2 in China's favour). Whichever way you look at it, India happens to be way behind China and hardly a consuming powerhouse as yet. The bracket of people who can afford premium smartphones is minuscule today, and many of these big spenders are increasingly smitten by the value propositions offered by the likes of OnePlus and Xiaomi. Apparently, OnePlus has purloined at least 15 percent of Apple's customers in India.

Then, there's the issue of manufacturing. Apple still isn't convinced that India can provide the kind of landscape that China does when it comes to setting up plants and making its high-end phones there, even though the government has issued a five-year moratorium of its law that requires 'single brand retailers' to source 30 percent of its manufacturing requirements within India itself.

Apple may have a drive for perfection and an unwillingness to compromise on quality, thus understandably preventing it from taking this leap. Yet, almost all of its Korean and Chinese competitors such as Samsung, Vivo, Huawei, Oppo, and Xiaomi have invested millions of dollars in local plants. Sure, you may not find any end-to-end manufacturing going on in the country, but many of them have started making vital components for their phones, such as circuit boards, which occupy a significant part of the value chain in phone making. The gravitation toward making full units will not be that far off.

If Apple followed suit, it could shave at least 15 to 20 percent off the handset price for 80 percent of its phones due to the avoidance of import duties. Consider this: Apple is the only major phone manufacturer to not make its phone in India today, while Samsung has opened up its largest global manufacturing plant there.

The fact is, as this VentureBeat article observes, Apple is not that interested or invested in tailormaking an approach for the Indian market, which may involve either manufacturing there, coming up with a cheaper product specifically for India or even absorbing some of that tax hit to make their phones on par with global prices just to garner market share in the country. It is quite content to simply sell its high-priced iPhones there at the rate it does while pocketing outsized profits. Even Apple Maps and Siri have not been calibrated well enough for the Indian market, while Apple services, such as Apple News and Apple Pay, are just not available as yet, which are more signs of hype rather than intent.

Don't look for that to change anytime soon -- despite Cook's sunny utterances about the country -- unless the company decides to act decisively on an India-specific strategy that sends phones flying off shelves.

Check out the latest information about 1 dollars in rupees today, 1 dollars in rupees,1 dollars in rupees in india 2018 and 1 dollars in rupees in 2014 only on uc browser!