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Why Apple is taking a beating in India

IPhone Retail in Asia

According to data from Strategy Analytics, Apple shipped just 800,000 smartphones in India in Q2 of 2016. That’s fairly typical of its recent performance in the world’s third largest smartphone market, but still down compared to the same quarter last year, when it shipped 1.2 million handsets.

India is expected to buy some 139 million smartphones this year, but the majority of these will be Android devices costing less than $150. The same data for the current quarter shows Google’s operating system capturing 97 percent of the market, and it’s just not clear what, if anything, Apple can do to change this state of affairs.

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The insurmountable barrier for the company is price. India is perhaps the most promising smartphone market in the world, growing 29.5 percent from 2015 to 2016, but the average selling price for handsets remains under $70. Apple’s cheapest iPhone is more than quadruple that.

Making a cheaper iPhone is the obvious response to this problem, but as has been proven time and time again, Apple doesn’t do cheap. It likes to keep its margins fat (although it stresses that high prices are a reflection of its dedication to quality, not profit).

Cheaper iPhones might be expected in other markets where smartphone penetration is low and there’s potential for expansion, butt this would throttle Apple’s profits before they’ve even had chance to grow.

(Source: The Verge)