India bears fruit for Apple: iPhone jumps to No 2 position in value in smartphones, pips BlackBerry

KOLKATA: Its cool quotient may be fraying at home, but Apple's iPhone has become the second largest smartphone brand in terms of revenue and the fifth largest by volume in India, muscling its way up the lea-gue tables helped by an advertising blitzkrieg and some aggressive pricing.

Yet-to-be-released data from industry trackers and mobile phone retailers is expected to show that Apple has dislodged BlackBerry and wrested revenue market share from No. 1 Samsung in the last quarter of 2012, no mean feat, analysts say, for a company that has long viewed India as a non-priority market. In fact, just six months ago, Apple Chief Executive Officer Tim Cook was quoted as saying India did not have high potential in the "intermediate term".
IDC's Asia-Pacific Mobile Phone Tracker for October-December 2012 will show later this week that Apple achieved a value market share of 15.6% compared with 3.9% in the preceding quarter.

Samsung, Apple Gap Narrows

In value terms, it was still way behind Samsung's 38.8% share, but ahead of BlackBerry's 6%, while its volume grew more than three times, putting the iPhone at fifth spot behind Samsung, Micromax, Sony and Nokia. "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 said. "We expect equally high numbers for the current quarter as well."

Indeed, analysts say the market share data for the January-March quarter will show a further narrowing of the gap between Samsung and Apple, making India the latest battleground for the high-pitch global battle between the two brands.

According to IDC data, Samsung, which is still the leader in the smartphones segment with a hefty lead, reported an almost 12% fall in value market share and shipments in the fourth quarter compared with the preceding one. Even BlackBerry and HTC lost ground during the period, which analysts attribute to Apple's aggression in the market place.

Another report on mobile phone shipments by Cyber Media Research is also expected to confirm Apple's jump in the smartphone league tables. The yet-to-be-published report is expected to say Apple had shipments worth Rs 1,142.8 crore in the October-December 2012 quarter into India, more than three times that of brands such as BlackBerry and Nokia.

"Apple has deep pockets and we have to take its sudden aggression seriously. However, it still has a long path to travel," said BlackBerry India Managing Director Sunil Dutt.

But Samsung, which sells smartphones at multiple price points unlike Apple's mostly premium pricing, is unfazed by Apple's newfound aggression in India. Company officials say Samsung enjoys more than 55% market share by value in the Rs 20,000-plus smartphones segment.

"We are further looking at consolidating our market leadership," said Samsung Mobile V-P Asim Warsi, adding the Samsung Galaxy Note 2 was the top-selling model in the Rs 20,000-plus smartphones market.

Analysts attribute the sudden jump in Apple's market share to a critical decision the company took last quarter to push sales in electronic stores through two retail distributors, Ingram Micro and Redington, instead of just relying on outlets of telecom operators.

Research firm Gartner's principal research analyst Anshul Gupta said the appointment of the two distributors, which together have more than 10,000 stores, suddenly increased the retail footprint of iPhones in India. Apple's decision to quickly launch the iPhone 5 in India, almost simultaneously with the global launch, together with local billing of apps in Indian rupees have also helped the brand gain traction. The performance of the brand will be music to the ears of Apple's bosses in Cupertino, California, who in recent weeks have been hauled over the coals over its stock price performance and the iPhone's seemingly declining allure compared with Samsung.

Mobile phone retail chains such as The Mobile Store, Future Group's eZone, Next Retail, Reliance Digital and Reliance iStore, which together operate 1,000 stores, report iPhone sales have doubled on a month on-month basis since January this year, helped by an aggressive pricing scheme that helps consumers buy an iPhone for a down-payment of Rs 9,990 and the rest in monthly instalments.

The iPhone costs Rs 45,500 on average, with the cheapest model (iPhone4 8GB) priced at Rs 26,500 and its latest and most expensive iPhone5 64GB model costing Rs 60,690. By comparison, the Samsung's Galaxy models cost between Rs 5,990 and Rs 20,900, with the priciest model at Rs 35,599.

Himanshu Chakrawarti, CEO at The Mobile Store, the Essar Group-owned largest cellphone retailer in the country with 800 stores, told ET the iPhone5 has become the second-highest selling model since January in its stores, next to Samsung Galaxy Grand Duos which is priced at less than half the Apple model.

In the case of The Mobile Store, Apple's share of total phone sales has risen to almost 17% from 5% in the past two months, with sales of the iPhone beating BlackBerry since last November. "The EMI scheme has made the iPhone affordable for Indian customers," said Chakrawarti.