This story was delivered to BI Intelligence Apps and Platforms Briefing subscribers. To learn more and subscribe, please click here.
Tim Cook's recent trip to India was widely publicized, and while there the Apple CEO admitted a problem with the iPhone.
During an interview with Indian news channel NDTV, Cook said the cost of the smartphone in India might be too high. iPhone prices in the country are 131% higher compared to the U.S., as a new version of the iPhone 6s costs approximately $1,400 in India.
This is a major problem for Apple as it tries to boost sales in a country in which approximately 80% of all smartphones cost less than $150, according to Bloomberg.
This is a significant issue for Apple as it tries to enter new markets as global smartphone sales decelerate in many mature markets, such as the U.S. and China. iPhone sales in India climbed 56% in India in Q1 2016, but that growth has yet to translate into tangible revenue growth for the tech giant. Apple needs a larger footprint and cheaper prices in the nation before it generates significant returns.
Cook did not say that the iPhone is overpriced, but admitted it might be too expensive for Indian customers. The CEO noted that excessive duties and taxes that India places on foreign nations are the main cause of inflated prices.
Apple is looking into other ways to reduce the prices gradually, such as its application to sell used iPhones in India as a way to expand its 2% market share in the nation. Unfortunately, that application was turned down earlier this month.
The global smartphone market is expected to slow considerably over the next few years. Despite a record-setting holiday quarter, 2015 was likely the last year of double-digit growth for smartphone shipments.
Mature markets were at the heart of this year’s deceleration. Adoption has reached new highs in key markets in the United States, Europe, and China. The pool of first-time buyers in these countries is shrinking rapidly, and sales are now primarily coming from phone upgrades.
Meanwhile, emerging markets will continue to see robust shipment growth. India and Indonesia, in particular, will help fuel a large share of the shipments growth within the global smartphone market over the next few years.
Will McKitterick, senior research analyst at BI Intelligence, Business Insider's premium research service, has compiled a detailed report on smartphones by country that forecasts the market through 2021 to reflect slower, stabilizing growth in the long term.
Here are some key points from the report:
- The global smartphone market is still growing at a steady pace due to more widespread adoption in emerging markets. We estimate the global market will hit about 2.1 billion units shipped in 2021.
- Shipments growth over the past few years has been driven by the falling price of smartphones, which has made handsets more accessible in emerging markets. The average selling price of a smartphone in India nearly halved between 2010 and 2015.
- With relatively low smartphone penetration, we forecast Indian smartphone shipments to grow rapidly over the next five years. Nevertheless, India has a long way to go before it surpasses China as the world’s leading market for smart handsets. India is estimated to account for roughly 10% of the global smartphone market in 2016, considerably less than China’s 30% share.
- The global platform wars are over, even as smartphone adoption continues to rise across various markets worldwide. Android and iOS are estimated to account for 97.3% of global platform market share in 2015, compared to 96.3% last year.
- Apple closed the year with another strong quarter on the back of its iPhone 6s and iPhone 6s Plus launches. Still, the vendor saw a slight decline in YoY growth of its share of the market in the face of stiff competition from Samsung and Chinese vendors such as Huawei.
In full, the report:
- Forecasts global smartphone shipments through 2021.
- Explores why India is the next high-growth smartphone market.
- Breaks down the global smartphone platform wars.
- Discusses smartphone vendor performance market share.
To get your copy of this invaluable guide, choose one of these options:
- Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> START A MEMBERSHIP
- Purchase the report and download it immediately from our research store. >> BUY THE REPORT
The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of the smartphone market.