the article misses a big point on why Apple products are slow to come to India. the Indian government has imposed a 51% FDI (foreign ownership) cap on single-brand retail stores, hence the most apple could own if they started apple stores in India is 51%.
India sells very little electronics online as of yet so most of Apple sales happen online. so if you are Apple and you arbitrarily have to give up 49% for no reason wouldn't you wait for regulations to change instead of helping prop up some arbitrary partner that you are forced to do business with? moreover, if you have to prioritize markets, wouldn't you prioritize markets where you own all of the business that you created before giving inventory that is in short-supply to a market where you are forced to sell through 3rd parties?
also, this does not even start to address the duties and other fees imposed on apple for selling in India which jacks up prices for their products and reduces their addressable market. again, if you have to prioritize wouldn't you choose markets that were more friendly assuming limited supplies of your product were available. wouldn't you only come in when supplies were high enough or products were saturated enough in other markets that were more favorable to you?
the article also confuses the population for India with Apple's available market in India, because of income levels in India a very small portion of the population has the income and desire to buy Apple products (Remember, India is the market of the TATA Nano, the 1 lakh car or about $2000 to $2500 USD based on the USD-INR exchange rate). Indians tend to very cost sensitive. Yes, India has over a billion people, but I bet Apple's market in India is 0.1% of the population or 1 million people max (and even then I think that 0.11% is high and overly generous). Compare that to Dubai or Singapore or Belgium where the population is much smaller but Apple's addressable market is higher due to incomes and purchasing behaviors.
I am Indian and live in Mumbai and would prefer new Apple products to be available in India sooner rather than later (I have a iPhone, iPad, AppleTV, and MacBook Pro), but I understand why Apple has made certain business decisions in how they prioritize their markets.
This FDI norms are hurdles but it should not be the only obstacle as there are many companies that are marketing their products successfully, in fact Dell is going to make $2billion from India alone and they have more than 20,000 employees there ... India is certainly a biggest growth market but then you need to concentrate on that properly by having active presence and that is what Apple lacks right now ...
first, don't think people who want to buy a Mac are considering buying a Dell or HP device, two different market segments with two different needs, that's like saying because the TATA Nano is selling well in India that Aston Martin should be prioritizing India as a key market despite there being more people who would actually purchase an Aston in a country like Dubai or Singapore or Belgium
second, I never suggested that India was a small computer market, just saying that the original article does not address some reasons beyond Apple's control nor does it look at things from Apple's perspective, Apple is not stupid if it was worthwhile for them to prioritize India higher the company would, just look at their efforts in China in terms of the iPhone and opening Apple retail stores, every business has limited time and resources and people and you are going to use those things in the markets that gives you the best return on your investment
The FDI cap easy workarounds involving setting up a wholesale business and signing up your customers as members (the CostCo model). Many other brands already do this.
Thanks for the explanation. Your comment was more informative than the article. I have always wondered about the reason for Apple ignoring India, and now I know what's going on.
one thing you have to also keep in mind about articles written by Indian publishers is that investigative journalism is basically non-existent
the amount of research that writers put into their articles is pathetically low, and editorial oversight takes a back seat to sensational headlines that grad attention and ad revenue
another way to look at Indian news media is that it actually makes Fox News in the US looks "fair and balanced"
if you think sensational seeking news media is a problem in the United States and elsewhere in the world, I don't even know how to describe how bad things have become here in India which is a shame because it used to be much better here in India
Having seen a fair share of Fox News and Indian media alike, they're on the same platform. Sensationalism exists in Indian media but none of them push an agenda as much as Fox news does.
On the other hand, you could compare CNN here and Indian news channels for the kludges and for relying on "public opinion and insights" rather than partaking in investigative journalism.
my guesses are
a. decreasing attention span
b. business - tabloid news sells better than investigative/informed journalism that presents both sides and a full set of arguments
c. cheaper/easier to be an echo chamber for mob sentiment than to be the voice of reason
> Compare that to Dubai or Singapore or Belgium where the population is much smaller but Apple's addressable market is higher due to incomes and purchasing behaviors.
Hmmm, can it really be true that Singapore (population 5e6) has a larger market than India (pop 1e9), even given the huge per-capita GDP difference?
I agree with the thrust of your point (and everything about FDI), but would be useful to look at the income distribution in India to see if your ballpark estimate is correct.
i concede your point in that my analysis is far from rigorous
my brief sample is walking around singapore you see many more people on a percentage basis with iphones in their hands and you go to coffee bean and tea leaf in singapore and you see that of those with computers out many more have MACs than their peer group in India at coffee shops with their laptops out - i am the first to say this is not the most rigorous argument
I have many friends and relatives who use apple products but none of them bought them in india but imported them via relatives and friends who live in US. Buying an apple product(except low end ipod models) in india is prohibitively costly and illogical since you will end up buying an older version.
Even though India not as lucrative as western markets for high end tech gadgets, the market is ever increasing and Apple should seriously change their strategy in India. It would be great if they open iStores in Metros where there definitely is a vast market to tap in.
I really think they should have should have said something about Notion Ink. While there have been bumps in the road, Indians aren't just waiting for Apple or Samsung to smile on them. Some Indians are making tablets of their own.
An Apple spokesman who asked not to be named said that the company did not disclose sales figures for India or discuss future release dates for products. He also declined to comment on criticism of Apple's strategy in India.
Useful...
What's most intriguing is that there is almost certainly some good (financial) reason for this strategy. Perhaps it's to do with marketing as Apple tries to make their products a sign of "rich and have friends globally" before opening up sales. I wonder how many new iPads Apple made for sale in India, or whether they are continuing to use existing stock.
if you took a casual survey of people owning apple products in India, in all probability you'd find that a bulk of those people would say that they procured the product via USA, UK, Singapore, Dubai or Australia and the likes vs. officially buying it from an Apple partner in India.
Although India is seeing economic growth, attaining US levels for income is a long way off. The top 5% of Indians by income have approximately the same level of purchasing power as the the lowest 5% of US residents on average according to World Bank economist Branko Milanovic in The Haves and the Have-Nots, a Brief and Idiosyncratic History of Global Inequality. [http://www.amazon.com/Haves-Have-Nots-Idiosyncratic-History-...]
That's not to say that there are not a large number of Indian individuals with substantial purchasing power (5% of Indians is 50 million people compared with 15 million in the US so there is a lot of disparity within the Indian group). Nevertheless, nearly everyone in the United States has more purchasing power than most of the top portion by income of the Indian population.
For Apple, it is a simple matter of economics - they will sell more iPads elsewhere and by creating scarcity they can sell older models at a high price to offset the lower profits Apple accepts when selling new products in wealthier countries.
Nevertheless, nearly everyone in the United States has more purchasing power than most of the top portion by income of the Indian population.
I beg to disagree. Top portion of indian income is a lot of people who can afford a lot of gizmos and $500 iPads are penny change for them.
To come back to the point of smartphones in India, considering that 3G came less than a year ago, http://thinkingaloud.in/ArticleComments.aspx?ArtId=770 says that there are already 8-9 million smartphones before 3G came. So lets throw affordability for the richer as compared to the poorer in America out of the window, shall we?
I am confident that India is on Apple's radar screen, and they are certainly interested in broadening their international markets. The fact that they don't discuss their strategy is well known and not surprising in this case. I also don't think anybody should be surprised that the business issues are different and complex compared to the US. This is probably further complicated by the fact that Apple wants to do things on its own terms most of the time.
As an aside for those who get tired of the news about Apple on HN, I find it a very good source of study for anybody interested in business. In particular you see Apple going against the conventional wisdom sometimes and they come up a winner. They have managed to put together a very robust team and are still in a period of explosive revenue growth. What's not to talk about?
The Reliance iStore (which is a "premium reseller" of Apple products and what most Indians think is an Apple store) was selling me a non-unibody Mac in mid-2010 in Chennai (a fairly large city of approximately 4.6 million people). I didn't bother to check what rev it actually was, but it certainly left a bad taste in my mouth about Apple.
It was the 17 inch model(which to be fair was the last one that even Apple phased out). The store I went to was on RK Salai.
I had gone to the store soon after the 2010 models were released. I thought it was mid-2010. But it seems the release date was April 13 2010. So I probably went within a week of that date.
How long have you been on Hacker News? Your account is only 20 days old; can you pass adequate judgment on the matter?
Simple answer: Apple is popular in Hacker News lately because they've done a lot of interesting (~ discussion-worthy) things lately, such as: change the App Store guidelines to demand 30% of subscriptions revenue, released a Mac OS X Lion developer preview, the iPad 2, renewed their Mac Book Pro lineup, Thunderbolt, controversy between Amazon and Apple regarding the name App Store...
Throw-away accounts on HN are quite common as are lurkers and the length of membership is irrelevant to the point.
Apple gets coverage because they are simply interesting to write about. On the other hand, the recent page one love fest on HN for the last MBP announcement was grossly disproportionate to it's importance.
> How long have you been on Hacker News? Your account is only 20 days old; can you pass adequate judgment on the matter?
So, if a person's userid is 20 days old, then does it directly mean that the person has been using the site for only 20 days?
what kind of logic is this?
Hence why I asked if they can pass adequate judgment on the matter, which I've now realized sounds horribly condescending.
Even so, I think the majority of frequent HN-readers (ie, those able of passing judgment on its trends) will have set-up an account, and I think the age of this account is a good indicator of how long you've spent reading it.
Nope, I thought HN was for news related to startups and things that are interesting to hackers. If more and more of news submissions here become related to Apple, then doesn't this make it Apple News?
"Indians are not maximalists, but they are not minimalists either."
"Indians like the idea of more in less."
India is a very different market and I guess Apple will take time to understand it but I hope its not too late ... Indian market is for both (classes & masses) and they both love and want Apple products... i was happy when i heard Tim Cook saying that Apple can't make products only for rich - this came when i guess cheaper iphone rumor was in media, and if Apple wants to remain world leader even 50yrs from now then they have to turn this rumor in to reality asap by pushing their innovation button even harder than ever before... India is a HUGE HUGE market and to understand that you require your active presence there ...Indians like the idea of more in less and that is the biggest challenge for any non-indian companies, because they just dont get it (in the beginning) ... for the first few years they struggle until they understand social-cultural-economical way of thinking of this unique society...
Well, the iPhone is 600-700 euro in Europe, too, but carrier plans are also cheaper than those in the states, as I would guess are in India. Things indeed look very unfair if you don't factor in subsidies and factor out taxes and duties.
900$ is when you have a carrier plan. There are two carriers in India which sell the iPhone at that rate. Again, anything around 600$ would have done wonders to Apple in India.
I myself would have bought it!
The 16 GB iPhone 4 is €659 with €15 per month for 12 months plan on Vodafone in Greece. I understand that the size of the respective markets is vastly different and that strategically sacrificing margins for market share is more justified for the Indian market, but my point is that higher prices than the US is not unique to India situation.
Please show enough courtesy for down-voting me, not that i take it personally but would like to know why you differ from my opinion which comes after 20yrs of sales and marketing experience to that market ...
I didn't downvote you but I couldn't make sense of your comment. Especially the last two sentences. The idea that India is "unique" and that corporations fail because they don't get the "more in less" culture seems very vague.
thanks for your explanation ... this is the exactly what I meant to say that when multinationals are given presentations by indian advertising agencies they say the same thing that you said above that "we can't make sense of your presentation".
Let me give you couple of examples - 15 to 20yrs a go there was this indian TV maker company that was giving toughest fight to multinationals like Sony, Samsung, LG etc. - these multinationals just couldn't get it how their product which is such a huge hit worldwide is not selling in india, the reason was that the indian TV was having more meaningful features than any other tv in the market ... also when Coca Cola and Pepsi came to india, they failed horribly in the beginning, in fact coca-cola realized very soon and bought highly successful indian brand "THUMPS-UP" but the biggest benefit they got is they also brought-in those indian executives to re-shape the strategy for Coke ... this is true for almost all the foreign companies , in fact Nokia is a huge hit in India, the reason being they innovate and market product specially made for indian consumers , one of the phone has a flashlight which is a huge hit in small towns where it gets dark early in the afternoon and there is no electricity on the road ... this kind of innovation is needed when you develop product for specific market/society - you just cant guess that what is successful in western countries will be successful by default in developing or third world countries where the consumer are very price conscious but won't sacrifice on quality and features ...
Okay, I kind of get this, but I still don't understand the upshot for Apple.
Apple's products are all pretty "generalist" -- you can make apps for them that do pretty much anything. So it seems like the iPad and iPhone should be a hit as is.
But I'm sure that Apple would rather give up the Indian market entirely than put a flashlight on an iPhone. The same goes for other sorts of feature considerations. I don't think Apple wants to compete in (or even believes in) markets where you compete by stacking up features.
one of the feature that i remember was that you can set individual settings for color, brightness, contrast and volume for each channel separately, this was a big issue as when you switch the channel suddenly color will change or volume will change due to default settings of the channel stations/broadcasters, the other was alarm settings and PIP etc.
India sells very little electronics online as of yet so most of Apple sales happen online. so if you are Apple and you arbitrarily have to give up 49% for no reason wouldn't you wait for regulations to change instead of helping prop up some arbitrary partner that you are forced to do business with? moreover, if you have to prioritize markets, wouldn't you prioritize markets where you own all of the business that you created before giving inventory that is in short-supply to a market where you are forced to sell through 3rd parties?
also, this does not even start to address the duties and other fees imposed on apple for selling in India which jacks up prices for their products and reduces their addressable market. again, if you have to prioritize wouldn't you choose markets that were more friendly assuming limited supplies of your product were available. wouldn't you only come in when supplies were high enough or products were saturated enough in other markets that were more favorable to you?
the article also confuses the population for India with Apple's available market in India, because of income levels in India a very small portion of the population has the income and desire to buy Apple products (Remember, India is the market of the TATA Nano, the 1 lakh car or about $2000 to $2500 USD based on the USD-INR exchange rate). Indians tend to very cost sensitive. Yes, India has over a billion people, but I bet Apple's market in India is 0.1% of the population or 1 million people max (and even then I think that 0.11% is high and overly generous). Compare that to Dubai or Singapore or Belgium where the population is much smaller but Apple's addressable market is higher due to incomes and purchasing behaviors.
I am Indian and live in Mumbai and would prefer new Apple products to be available in India sooner rather than later (I have a iPhone, iPad, AppleTV, and MacBook Pro), but I understand why Apple has made certain business decisions in how they prioritize their markets.