Click to Skip Ad
Closing in...

Apple’s next big iPhone growth plan faces some big hurdles

Published May 4th, 2016 8:30PM EDT
iPhone Sales India

If you buy through a BGR link, we may earn an affiliate commission, helping support our expert product labs.

Apple last quarter sold 51.1 million iPhones, an impressive figure to be sure, but markedly lower than the 61.1 million iPhones it sold during the same quarter a year-ago. And while there are cogent explanations that put the iPhone’s year over year sales decline into context, analysts and pundits – as is seemingly their nature – are opting to willfully ignore them and have instead taken to calling for Tim Cook’s ouster.

While the notion of getting rid of a CEO who helped generate more revenue in a single quarter than Google, Microsoft and Facebook combined is nonsensical, the reality is Apple, at some point in the near future, will need to demonstrate to investors that there’s still a lot of life left in the iPhone.

DON’T MISS: Amazon’s 11 best deals: $299 Nextbit Robin, jumping drone, discounted laptops and more

A boost in iPhone sales can come from any number of sources. Of course, the most obvious source is the upcoming release of the iPhone 7, a device which may very well usher in a huge upgrade cycle. Another avenue for increased iPhone sales – and one which Apple has been championing to investors – is a focused expansion in India. With over 1.2 billion people, India is the second most populous country in the world. And seeing as how iPhone sales exploded once Apple expanded into China, Tim Cook recently has been intimating that Apple may experience the same boost once the company’s expansion plans in India are realized.

At the surface, this line of thinking makes sense. A deeper examination, however, demonstrates that the market realities that made Apple’s foray into China such a stunning success don’t exist in parallel in India.

First off, Apple was recently rebuffed in its efforts to sell used (read: cheaper) iPhones in India. As an emerging smartphone market, Apple was hoping to flood India with refurbished iPhone models to help it compete against more affordably priced models from handset rivals. But for whatever reason, the Indian government last week rejected Apple’s plan. Thankfully for Apple, they just released the iPhone SE which, while not as cheap as, say, a used iPhone 5s, is much more affordable than the company’s flagship iPhone 6s devices.

Second, the economic environment in India is not the same in China. India may have more than 1 billion people, but the percentage of individuals who can afford an iPhone is much smaller than it was in China when the iPhone launched there.

To this point, Roopesh Chander writes:

I think Tim Cook’s outlook on the Indian market is a little too optimistic.

Firstly, iPhone sales in India were never really hampered by the inavailability of LTE (or 4G as they call it here in India). Anyone who can afford an iPhone in India has access to a fast broadband internet either at home or at work, probably both.

Third, India is indeed looking a bit like how China was in 2005 in terms of GDP per capita, but India has far less number of people who can afford an iPhone than China does. The addressable market for Apple in India is tiny, and is growing quite slowly 1. Of that, those who can afford the current year flagship will constitute a miniscule number compared to China.

Chander also points us to some interesting data from Pew Research which notes that less than 2% of Indians earn more than $20 a day.

All that said, Apple has a tough road ahead in India, and an expanded presence there is by no means a guarantee that Apple will see a discernible uptick in iPhone sales.

Yoni Heisler Contributing Writer

Yoni Heisler has been writing about Apple and the tech industry at large with over 15 years of experience. A life long expert Mac user and Apple expert, his writing has appeared in Edible Apple, Network World, MacLife, Macworld UK, and TUAW.

When not analyzing the latest happenings with Apple, Yoni enjoys catching Improv shows in Chicago, playing soccer, and cultivating new TV show addictions.