KOLKATA/NEW DELHI: Encouraged by the popularity of the iPhone 5S in India, Apple has targeted Rs 1,000 crore from sales of the handset this quarter, which will make it one of the most successful smartphone launches in the country and in line with that of devices such as the Galaxy S series of phones made by market leader Samsung.
The goal is about twice the sales of the iPhone 5 in the year-ago quarter, which made Apple the second-largest smartphone vendor in India by value after Samsung.
Apple is also looking to tap the 6 lakh owners of the iPhone 4 to trade up to the new model, currently the costliest smartphone in India at Rs 53,500 for the 16GB unit, Rs 62,500 for the 32GB one and Rs 71,500 for the 64GB handset.
It has also launched its biggest advertising campaign ever in India, estimated at around Rs 25 crore, for the iPhone 5S and 5C in partnership with distributors Redington and Ingram Micro, along with telecom partners Reliance Communications and Bharti Airtel.
Apple has less than two months to sell about 2 lakh new phones to meet its target and has sought fresh supplies of the iPhone 5S, reportedly sold out after its November 1 launch in relatively sparse numbers, according to three senior executives at Apple’s trade partners in India. They didn’t want to be identified. “Apple is aware its iPhone 5S has become an instant hit,” said one of those cited above.
The iPhone 5C, with a plastic body, is priced at Rs 41,900 for the 16GB model and Rs 53,500 for the 32GB one. The Cupertino, California-based company is seeking to gain market share in India, the world’s biggest market for mobile phones after China, which it neglected until about a year ago when it began trying to push its products with installment plans and other programmes.
It’s also concerned that this has allowed companies such as Samsung to take advantage of the vacuum created by Nokia’s weakening presence to gain a dominating lead in the marketplace, with an added edge provided by the launch of products such as the new Samsung Galaxy Gear smart watch.
Samsung’s leadership also means the wider adoption of the Android ecosystem developed by Google to the detriment of Apple’s own iTunes app store. “While Android has a lot of flexible apps, most of the apps on (Apple’s) iOS platfrom are paid, which does not go very well with the Indian consumer,” said Sankalp Damani, associate consultant, business advisory services, EY.
Still, Apple wants to make sure it doesn’t miss this opportunity to rapidly scale up its market share in India. Top multi-brand electronic retail chains such as The MobileStore, eZone, PlanetM and UniverCell, along with the Apple premium resellers, said bookings for the iPhone 5S are more than twice what they sold during the launch phase.
“There is unprecedented demand for iPhone 5s with almost 60% of the consumers who have booked the handset (having) paying for it in full, even though fresh stocks would come only next week,” Himanshu Chakrawarti, CEO at The MobileStore, the country’s largest cellphone retailer and the largest seller of iPhones in India, said on Saturday.
Reliance Communications (RCom), which became the first telecom operator in India to launch a bundled deal on the new iPhones similar to contracts in the West, also said demand had been unprecedented with stocks selling out in less than 40 minutes.
Bharti Airtel, which is offering the iPhone models at discounted monthly rental plans as it did with previous Apple handsets, declined to comment on the marketing expenditure. TBWAChiatDay, the global creative agency for Apple, declined to comment. Samsung didn’t respond to questions.
When contacted, Samsung India country head for mobile phone business Vineet Taneja refused to comment for the story since it’s on competition.
In response to an email query, an Apple spokesperson, Alan Hely, replied from regional headquarters in London: “Apple doesn’t split its revenue by individual products, nor by product by country, therefore we are unable to contribute to your article.”
Samsung is the market leader in the Indian smartphone market with a 34% volume share in the July-September quarter, followed by Micromax at 21%, Karbonn at 10% and Sony with 6%, according to estimates by market tracker Canalys.
Apple’s volume share was around 1.5%, but its value share was higher at more than 6%, which is expected to swell in the October-December quarter with the new launches.
The new phones have been the best launch ever for Apple, with the company selling a record nine-million units of the iPhone 5S and iPhone 5C in just three days of their introduction on September 20.
Apple’s CEO Tim Cook recently said in an analyst conference call that there was a supply backlog for the iPhone 5S due to high demand. “However, our supply is building each week and we’re very confident of our ability to keep ramping,” he had said.
Samsung has responded to Apple’s push with promotions of its own. On the weekend, it rolled out a cashback offer on the flagship Galaxy S4 smartphone along with an EMI scheme. “Samsung has become a lot more aggressive now that Apple has got a good traction, offering an indirect discount of more than Rs 5,000 on Galaxy S4 through promotional schemes,” said D Satish Babu, MD of UniverCell Telecom, India’s second-largest cellphone retail chain.
The South Korean company this month launched the Galaxy Golden at Rs 49,900, pitted directly against the gold iPhone 5S.
“Apple, however, has a dedicated consumer base of old iPhone users who want to upgrade to the iPhone 5S,” Babu said. “The Apple-Samsung war will play out in full swing this quarter, considering the market has not slowed down post Diwali and marriage season is round the corner.”
Trade insiders said Apple may line up promotional offers in December to boost sales, including cashback and buyback offers.