India a Massive iPhone Sales Growth Opportunity for Apple: Kantar Worldpanel

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India a Massive iPhone Sales Growth Opportunity for Apple: Kantar Worldpanel
Highlights
  • The data claims that purchase intention is high in the country this year
  • Apple currently owns 3 percent of the market share
  • This is expected to grow in the near future

Fresh data from Kantar Worldpanel indicates that India could be a very important country for Apple moving forward. The report states that Apple is the second most preferred buying brand in the country, and smartphone penetration has been increasing at a rapid pace year-on-year in India, creating a massive opportunity.

The Kantar Worldpanel report notes that Apple had just a 3 percent market share in terms of smartphone sales in India in Q1 2017, this is expected to grow in the future with various strategic moves made the company as well as the way the Indian smartphone market is evolving. Smartphone penetration in India grew by 16 percent year-on-year in the first quarter of 2017; while worldwide growth was just at 3 percent, indicating the potential in the country. Furthermore, the report also hints at great purchase intention, with 52 percent of smartphone owners looking to upgrade their devices in the next twelve months. For now, Samsung remains the most preferred brand in the country at 26 percent, but Apple follows second with 15 percent share. Between 7 and 8 percent of consumers want to purchase Vivo or Oppo smartphones, the report added.

"Apple accounted for 3 percent of sales in the most recent period but has recently made several strategic moves in India, including teaming up with Reliance Jio to offer free 4G service for one year to purchasers of iPhone 7 and iPhone 7 Plus. Apple is also planning to manufacture iPhones in India in the near future to deflect some of the high import taxes that make iPhones inaccessible to many Indian buyers," the report notes.

The report also points to the importance of in store presence to achieve growth - citing Vivo and Oppo's success, something Apple has been expected to do for a while. 68 percent of smartphones were purchased in brick-and-mortar stores in the last quarter, compared with 21 percent from online stores, the report notes.

Also, the Kantar Worldpanel report states that the advent of 4G will also spiral Apple's growth, as users will look to buy more premium 4G handsets. "Rapidly expanding 4G infrastructure and low-cost 4G data services introduced by India telecom leader Reliance Jio have led to increased competition in India and stimulated higher demand for 4G-capable devices. The push towards digital currency, which promotes a potent new use case for smartphones, is also expected to accelerate sales."

Pricing continues to be a factor, then Kantar report goes on to note, but has become "less significant". While two-thirds of the market still buys smartphone under $180 (roughly Rs. 11,600), the price band from $180 to $300 (roughly Rs. 19,300) has seen some growth, driven by Xiaomi, Oppo, and Vivo, the report adds.

"Purchases over $300 (roughly Rs. 19,300) remain a small fraction of the market, but this is where Apple and Samsung dominate, as they do in more developed markets. For Apple and Samsung, growth opportunities in India may not be immediate, but over the next few years we believe that consumers will become more engaged in services, 4G infrastructure will be stronger, and by all predictions - people will want more premium phones," it says.

While India is still insignificant on Apple's global map, the potential here is immense in the near future. The numbers in the first quarter of 2017 attest to that. While global iPhone unit sales were down marginally year on year, the company had plenty to cheer about its performance in India. Apple's quarterly revenue grew by "over 20 percent" in the Indian market.

In the earnings call, CEO Tim Cook also lauded the improving 4G infrastructure, and hinted that an opportunity for Apple is there in the Indian market. "We believe, particularly now that the 4G infrastructure is going in the country and is continuing to be expanded, that there is a huge opportunity for Apple there," Cook said while answering a question during the earnings call. "And so that and the demographics of the country is why we're putting so much energy there."

Apple has also confirmed that it plans to significantly invest in India, including retail stores, and is looking to manufacture iPhones in India.

The Kantar Worldpanel further reports its India smartphone sales market share figures, detailing the top manufacturers. Samsung has a 27 percent share and takes the top spot, while Xiaomi and Vivo are tied for second place at 12 percent, Lenovo (including Moto) at 11 percent, Oppo at 10 percent, and Micromax with 5 percent and the sixth position. Together, local brands like Micromax, Intex, and even Reliance Retail brand Lyf account for just 12 percent of the market, the report adds.

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