NEW DELHI: John Sculley, the former chief of Apple, says though smartphones is a "two horse-race globally", Samsung

is better placed to trump even a full-fledged Apple operation in India1. On a visit to India last week to promote his private equity firm's three business interests in the country and scout for more, Sculley did not mind dwelling on the prospects of the iconic computer firm he presided over from 1983 to 1993, a stint marked by Apple's revenues growing 10-fold to $8 billion and an overt power struggle with its illustrious founder Steve Jobs. Speaking about Apple now "as an observer", he saw pricing as the deal-breaker in the Indian smartphone market. "Somebody will have to lower the price to crack the Indian market. I think Samsung will come out with a $100 (about Rs 5,000) smart-phone," the 73-year-old told ET. "Apple won't make it that cheap. I cannot imagine Apple compromising on the principles of Steve Jobs -- elegance of design, great hardware and quality." Sculley's corporate career, spanning nearly five decades, has seen spectacular successes and flameouts. At 30, he became the youngest vice-president of Pepsi in 1970, when it set out to dethrone Coca-Cola, in what is now known as the 'cola wars'. At 37, he was named Pepsi's youngest-ever president. Then came Apple, after which Sculley has been associated with a string of businesses, some of which went bankrupt and some of which have been spectacular exits (like 3G wireless services provider MetroPCS, travel portal hotwire.comand products portal buy.com). Since 1995, he has been a partner at Florida-based PE firm Sculley Brothers and is eyeing businesses targeted at India's youth. "This is the right time in India," he says. "I find business ideas targeting the 25-30 years bracket as the ones to invest in and that's what I'm doing here." Sculley is looking to invest $100 million in Indian start-ups this year. Seven months ago, Sculley co-founded e-commerce company changemytyre.com. Last November, he invested in Iris Computers, a Delhi-based distributor of electronic gadgets, and is looking to close another acquisition in IT this quarter. For all that, Sculley is still best know for his Apple association. He told ET that Apple products (iPhone and iPad) took off around the world because 3G services were good and reliable. "That was not the case in India and India was never a priority for Apple." And even though 3G is around the corner in India, and even though Sculley feels the country is at the cusp of a mobile Internet and e-commerce wave driven by low-cost smart-phones, he doesn't see Apple taking a large bite. "At $800 a piece for an iPhone, that's unlikely to be mass market in India." Globally, Samsung has a 23% market share in smart-phones, compared to Apple's 5.5%, according to Gartner. Apple does not share country-specific market share figures.
1

http://timesofindia.indiatimes.com/tech/tech-news/hardware/Samsung-will-beat-Apple-in-IndiaFormer-Apple-CEO/articleshow/18146778.cms

That said, Apple seems less perturbed by market share as it corners 80% of profits in the smart-phone business, says Sculley. Apple won't lower costs, adds Sculley, but it will differentiate with end-to-end offerings -- software, hardware and apps. "The future in smart-phones is for companies who can tie up all three on their own, like Apple has," he says. "Samsung depends on Android (the operating system from Google) and that will have to change as it grows bigger. And that's where Nokia, Sony and HTC are falling behind."

http://blogs.wsj.com/indiarealtime/2012/09/14/why-apple-has-tiny-market-share-inindia/ Apple doesnt like how it must do business in India, where it has to tie up with national, regional and local distributors to get its products to consumers. Why do Apple devices have such a small market share in India, the fastest-growing wireless market in the world? Apples market share of handsets in India is 1.2%, according to research firm IDC. South Koreas Samsung, the market leader, has a 51% piece of the pie. Apple sold around 100,000 phones in India in the first six months of 2012, much lower than China, where the Cupertino, Calif. Company sold 2.3 million in the second quarter alone. One reason is that Apple doesnt like how it must do business in India, where it has to tie up with national, regional and local distributors to get its products to consumers. At each stage the company pays fees to its partners, eating into profitability. You know of course I love India, but I believe that Apple has some higher potential in the intermediate term in some other countries, Tim Cook, Apples chief executive, said during an analysts call on July 24. We have a business there, that business is growing, but the sort of the multilayer distribution there really adds to the cost of getting products to market, An Apple spokesman declined to comment. Rajeev Gopi, a senior market analyst at IDC, says Samsung, whose Galaxy series is the top-selling smartphone in India, is willing to pay distributors in a bid to build market share. A spokeswoman for Samsung in India said the company continues to enjoy profitable growth in the country. Samsung says India is one of its top three strategic markets after the U.S. and China in terms of the number of smartphones sold. Apple, by contrast, is focusing elsewhere, which explains why the companys launch of the iPhone 5 in India is expected to be some time in December, much after its launch in major markets like the U.S. and Europe. Another reason for Apples low volumes in India is cost. Unlike in the U.S. and Europe, the company sells most of its handsets in the open market, not through tie-up deals with carriers who subsidize the selling price of phones. In China, Apple sells most of its phones on the open market and that hasnt hurt sales. But India is a more price sensitive market, says Anshul Gupta, principal research analyst at research firm Gartner Inc IT -0.27%. Apple, he adds, hasnt been willing to

cut prices to build volume. Apples strategy is to focus on its profitability, not on market share. He doesnt foresee Apple changing that strategy to cater to India, the largest wireless market in the world after China, with more than 900 million subscribers. Samsung, on the other hand, offers a wider range of prices for its smartphones. Samsungs portfolio range in cost between $130 and $700 in the Indian market, compared to a base price of $360 for a three-year old version of Apples iPhone. Analysts say sales of smartphones, which account for 6.5% of overall handset shipments to India, may surge driven by the growth of Internet usage among the countrys 1.2 billion people. Technology giant Google Inc GOOG +0.39%. last year predicted India may add 200 million Internet users by 2014 to its current 100 million users. Google points out that a large chunk of those users are likely to access the web through smartphones. Faisal Kawoosa, the lead telecom analyst at CyberMedia Research, a research and consulting firm, says Samsung benefited from establishing a strong distribution network in the country, offering better fees to its partners than competitors. Mr. Gopi says the Chinese market for smartphones is more evolved than Indias, where low-end smartphone penetration is still growing sharply. In China, the market for lowend smartphones is pretty much mature. Now, the Chinese aspire for premium products like the iPhone, he adds. Further, iPhones sales there are aided by carriers like China Unicom 0762.HK +0.99% and China Telecom CHA -0.29% who subsidize the cost of phones for subscribers, like in the U.S. In India, Apple sells most of the phones in open market, although it has had limited partnerships with carriers like Bharti Airtel Ltd 532454.BY -1.86%. and Aircel Ltd.

Apple and Samsung continued to dominate the smartphone market worldwide by controlling a market share of 46.5% in the third quarter of 2012, said a Gartner report. Worldwide sales of mobile phones to end users reached almost 428 million units in the third quarter of 2012, a 3.1% decline from the third quarter of 2011. But smartphones continued to fuel sales of mobile phones worldwide with sales rising to 169.2 million units in the third quarter of 2012. These sales accounted for 39.6% of total mobile phone sales.

Also Read Related Stories

News Now

- Can Akula do a Jobs with SKS? - Can Akula make an Apple out of SKS? - New Lumia phones may win Nokia more time - Asian shares pressured by uncertainty over U.S., Greece Nokia continued to see a fall in the smartphone category. Nokia slipped from No. 3 in the second quarter of 2012 to No. 7 in smartphone sales in the third quarter of 2012. Nokia's mobile phone sales declined 21.9% in the third quarter of 2012, but overall sales at 82.3 million were better than Gartners early estimate, largely driven by increased sales of the Asha full touch range. Nokia had a particularly bad quarter with smartphone sales, and it tumbled to the No. 7 worldwide position with 7.2 million smartphones sold in the third quarter. The arrival of the new Lumia devices on Windows 8 should help to halt the decline in share in the fourth quarter of 2012, although it wont be until 2013 to see a significant improvement in Nokias position, said Gartner. Both vendors, Apple and Samsung, together controlled 46.5% of smartphone market leaving a handful of vendors fighting over a distant third spot. Both HTC and RIM have seen their sales declining in past few quarters, and the challenges might prevent them from holding on to their current rankings in coming quarters, said Anshul Gupta, principal research analyst at Gartner. RIM moved to the No. 3 spot with HTC not far behind, at No. 4. Samsungs mobile phones sales continued to accelerate, totaling almost 98 million

units in the third quarter of 2012, up 18.6% year-on-year. Samsung saw strong demand for Galaxy smartphones across different price points, and it further widened the gap with Apple in the smartphone market, selling 55 million smartphones in the third quarter of 2012. It commanded 32.5% of the global smartphone market in the third quarter of 2012. Apples sales to end users totaled 23.6 million units in the third quarter of 2012, up 36.2% year-on-year. We saw inventory built up into the channel as Apple prepared for the coming holiday season, global expansions and the launch into China in the fourth quarter of 2012, said Gupta. With iPhone 5 launching in more territories in the fourth quarter of 2012, including China, and the upcoming holiday season Gartner analysts expect Apple will have its traditionally strongest quarter. In the smartphone market, Android continued to increase its market share, up 19.9 percentage points in the third quarter of 2012. Although RIM lost market share, it climbed to the No. 3 position as Symbian is nearing the end of its lifecycle. There was also channel destocking in preparation of new device launches for RIM, which resulted into 8.9 million sales to end users in the third quarter of 2012. With the launch of iPhone 5, Gartner analysts expect iOS share will grow strongly in the fourth quarter of 2012 because users held on to their replacements in many markets ahead of the iPhone 5 wider roll out. Windows Phones share weakened year-on-year as the Windows Phone 8 launch dampened demand of Windows Phone 7 device

Apple, the worlds largest technology company and the maker of some of the most popular gadgets on the planet, doesnt seem to be very big on the Indian market. India, with its 900-million odd subscribers, is the worlds second-largest market after China, but Apple has very little in the way of retail presence here. Apple has a huge marketshare in the US and in most western markets, but when it comes to emerging markets like India, Apple is nowhere to be found. Apples phones have a market-share of 1.2% in India, according to a recent report from IDC. Despite the low market-share and the presumed potential of the market in India, Apple doesnt seem to be making any effort to market its devices in the Indian market.

Apple has 390 stores worldwide, including 5 in China, but 0 in India. Even its distribution channels are few and far between. Apple devices are very expensive in India, especially compared to equivalents from Samsung and the other handset manufacturers. New phones are launched very late in India (Samsung, on the other hand, launched the Galaxy S III in India at about the same time as the global launch). Worse still, the Indian cellphone operators dont seem to be interested in pushing the iPhones either. Samsung and HTC advertise extensively in India, but Apple doesnt spend a rupee. What gives? Why doesnt Apple seem to be at all interested in the Indian market? Apple seems to be happy with whatever little it is selling in India with no effort. The first thing that comes to mind is that Apple is worried about intellectual property or it doesnt want to sell unlocked phones, for worries that they may get pirated. But this isnt true, because Apple sells unlocked phones in China, and the loose IP regime in China doesnt seem to worry Apple too much. Also, the iPhone is made mostly in China, so the IP argument doesnt really hold either. Then what is it? Why doesnt Apple make any effort to show that it is the least bit interested in India? When asked about it, Tim Cook said, You know of course I love India, but I believe that Apple has some higher potential in the intermediate term in some other countries,

during an analysts call on July 24. We have a business there, that business is growing, but the sort of the multilayer distribution there really adds to the cost of getting products to market, That explanation is somewhat weak, because Samsung and Nokia and HTC and every other manufacturer is playing in the same conditions and they seem to be doing quite well, even with high-end phones. While it is true that there is a multi-layered distribution in India, theres really nothing stopping Apple from opening Apple stores, which it operates all around the world. And with the FDI limit in single-brand retail at 100% now, the control-freak Apple has nothing stopping it from owning and operating its own stores now. Besides, Samsung seems to be quite comfortable selling their Galaxy phones through distributors and through Samsung-branded stores. It has payed off for Samsung, which now has a 51% market-share in India according to the same IDC survey. One explanation is that Apple doesnt need to market in India, and it is just happy with whatever little it is selling in India (with no effort). Its products have such a strong appeal that Apple doesnt need to pay attention to the market, and it will just take off anyway. Does Apple believe that Steve Jobs reality distortion field extends all the way into the Indian market? Incidentally, its been exactly a year today that Steve Jobs died, but Apples strategy towards India with or without Steve Jobs hasnt changed at all. Another reason could be that Apple doesnt want to be associated with India. India (and other emerging markets) dont quite fit in with the premium positioning of the Apple brand. Samsung has phones from INR 5000 to INR 36,000 in the Indian market, while Apples iPhone 4S costs around INR 36,000. The iPhone 5 isnt even available officially in India yet, and Apple seems to be unwilling to reduce its pricing or margins and is also unwilling to give more leeway to the distribution partners at all. Cleverly, Samsung has exploited this situation to capture huge market-share. According to Google, India is likely to add 200 million internet users in the next 2 years, a big chunk of whom will come from Smartphones. The Smartphone market size in India is set to be 19 million units this year, growing rapidly in the next couple of years, and Samsung has a huge chunk of that market. In any case, I dont think this is a good strategy for Apple in the long run. The Indian market is very big by volumes, and even if it doesnt have a big market for expensive smartphones right now, it will in a couple of years. By conceding this market to the likes of Samsung and HTC, is Apple making a big mistake? Can Apple continue to ignore the market like this? Does Apple even need the Indian market? One major reason for Apple not so keen in the Indian market is its limitation in the scalability to meet the market demand. The OEMs that manufacture apple products have strong presence in China (like Foxconn) the labour & material cost works out Very cheap for Apple in China. For Apple to start such an infrastructure in India and to maintain the supply chain with its suppliers of that scale, India doesn't have the infrastructure in place or the framework to fall into their manufacturing ecosystem. In the case of Samsung & Nokia, they have a strong supplier presence in India and also they have their own factories that manufacture the devices. Apple doesn't have such an

scale to operate in India. Operationally Apple will fail to compete with its current model by opening direct stores or building the distribution channels without proper backbone to support the market demand. The landing cost of the apple device will be too expensive and not affordable for the consumers to buy at that price. The bottom line for Apple will be very thin. Fundamentally Apple doesn't like to compete in a market place where they are not no:1, by all practical sense Apple's stand on India holds good from their perspective. For apple to be successful in India, they need to invest a lot before looking for revenue growth or making it viable for Indian consumers. there are bunch of issues that prevents apple coming to India. Apple is very highly dependent on an organized market to do business. India is unfortunately not an organized market, the entire potential of the iphone will not be used by many. Spending money to purchase apps and music through iTunes is not an Indian mindset. Apple makes a ton of money from Apps & iTunes which are regular sources of income other than the iphone's one time sale. Other reasons include Apple stores, going through distribution networks again comprises of reliability. In the US, Apple resells through various distributors such as Best buy and others through a very efficient supply chain model. In India, this is a tough ask. Apple does not have a huge fan following in India and most people don't share the same excitment level as opposed to the west. This makes demand forecasting very difficult. Given the number of users who own apple products in India, India sales is peanuts for apple. The whole ecosystem that apple has created in the US revolves around a very organized market. Stats reveal that almost every family in the US has an iphone and this is a tough number to beat and India is far far away for Apple. I feel FDI is not a reason for apple not to enter India, they don't' see a potential market for them to sell here given the price points and the potential customer base. As the author mentions, sales will happen no matter what.

Android is leading the smartphone pack in the latest survey from Gartner. Worldwide, there were 419 million phones sold in Q2, which is actually down slightly from the year-ago period. About a third of them were smart phones. Gartner says that mature markets in the US and Western Europe were hurt by the economic slowdown and consumers unwillingness to buy ahead of hoped-for launches in the second half of the year.

Samsung continues to distance itself from the competition, according to Gartner. Samsung and Apple continued to dominate the open OS market, together taking about half the market share, and widening the gap with other manufacturers. No other smartphone vendors had share close to 10%. In the race to be top open OS manufacturer in 2012, Samsung has consistently increased its lead over Apple, and its open OS market share increased to one-and-a-half times that of Apple in 2Q12. Apple's market share in open OS slid from 22.5% to 18.8% in 2Q12, with users postponing their upgrade decisions in most markets ahead of the upcoming launch of the iPhone 5. This is likely to be the biggest iPhone upgrade yet. On the other hand, Samsung's brand strength and wide device portfolio has allowed it to take advantage of the high growth opportunities in emerging markets. Samsung's

dominance is so strong in some markets that it is increasingly difficult for other manufacturers to make any move in the open OS market. For example, in India, Samsung's share has risen from 15% in 1Q11 to 49.8% in 2Q12, and with its current strategies, it may end 2012 with over 60% exactly where Nokia was at the start of 2011. By swapping position with Nokia in just two years, and with a mammoth open OS market share, Samsung can make the market dance to its tune. Its worth noting that Samsung widened its share in all markets except North America. As flagged by CEO Tim Cook in a recent conference call, Apples iPhone sales declined 12.6% from Q1thats a big blow, since 46% of Apples revenue comes from sales of the smartphone. But watch out for iPhone 5 coming in September or October: The arrival of the iPhone 5 should provide the greatest upgrade opportunity yet as the expected new design with a larger screen and likely other stylistic changes to the form factor will certainly make a strong case for iPhone 4 users to upgrade. The lower sell-in number in 2Q12 might also signal that Apple may discontinue the 3GS model and could have already reduced supply. We could see Apple drive down the price of the iPhone 4 to free, the 4S to $99, and have the new iPhone priced the same as the current 4S model. Of course no word from Apple about when the iPhone 5 might debut. What about you? Are you holding off on buying a new phone until iPhone 5 comes out? Is your company delaying purchases?

Apple Inc. is changing the way it sells iPhones in India, where it has a small market share despite the fact the South Asian nation is among the fastest-growing wireless markets in the world. Apple doesnt run branded stores in India because local regulations make that difficult. Until now, Apple has sold the iPhone through Indian telecom providers, who bundle the phones with data services. As Indian telecom companies dont subsidize the cost of iPhones, as in the U.S., these sales have been limited. Some independent mobile phone retailers, which buy from the providers, also sell iPhones. But distribution has been limited mainly to large towns. This distribution model, coupled with the iPhones high cost, has left Apples market share in India in the doldrums. According to research firm IDC Inc., in the April-June quarter of this year, Apples share of handset sales in India was only 1.2%, half the level a year earlier. During this period, South Koreas Samsung Electronics Co. Ltd., the market leader, more than doubled its market share to 51%, IDC says. Now, Apple is looking to change the way it distributes the phone. A person who has knowledge of the plans says Apple will begin selling the iPhone through specialized distribution companies in an attempt to reach a wider audience, especially Indians who live in thousands of smaller towns. The Cupertino, Calif. company has recently tied up the local operations of Ingram Micro Inc., a large U.S.-based distributor of technology, and Redington (India) Ltd., a local distributor with 12,000 smaller partners across the country, the person said. Redington confirmed that it has added iPhones to the list of Apple products it is selling in India. A spokeswoman for Ingram Micro wasnt immediately available for a comment. Apple declined to comment. Apple has used both these distributors in the past for products like the iPad, but did not do so for the iPhone as it was concerned that paying third-party distributors would eat into its profit margins on a key product. Apples Chief Executive Tim Cook said earlier this year that the company saw higher potential in countries other than India, largely because of the high cost of distributing products here. We have a business there, that business is growing, but the sort of the multilayer distribution there really adds to the cost of getting products to market, Mr. Cook told analysts in July. The companys decision to go through distributors perhaps shows the company is willing to see its margins decrease for now in an attempt to get a bigger toe-hold in India for the iPhone, said G. Rajeev, a senior market analyst with research firm IDC Inc. Samsung already sells its phones through a nationwide network of distributors.

Analysts say the move could help make the iPhone more available but will have an uncertain impact on sales because the main deterent to Indian consumers is the high price of the device. This may not push up Apples sales of phones in India dramatically, says Anshul Gupta, principal analyst at research firm Gartner Inc. They will be able to take some more sales, but dont expect them to sell a million phones in a quarter. According to Mr. Gupta, about 70% of the 220 million handsets predicted to be sold in India this year are in the sub-$100 price category. He says the market for $800-plus devices, which is predominantly where Apple belongs, is very small. The distribution changes come as Apple is gearing up to launch the iPhone 5 in India. The phone is expected to be sold at a price anywhere between 45,000 rupees ($854) and 50,000 rupees. Analysts are now saying the latest iPhone should be launched in India some time at the end of this month. The iPhone 5 launch will then coincide with Indias upcoming festival season which will run from mid-October through December this year when many Hindus tend to purchase luxury products like smartphones, cars and jewelry. Apple has declined to give details. The iPhone 5 will be coming to India much later than its launch in other markets. Ahead of the launch, the company has cut the prices of its older versions of the iPhone. The 8-gigabyte model of the iPhone 4 is now available in the market for 26,500 rupees versus 28,300 rupees earlier. The 16GB model of iPhone 4S has now been priced at 38,500 rupees compared with 41,500 rupees previously. In addition, it has also made minor price adjustments to the 32GB and 64GB models of the iPhone 4S. It is phasing out the 3GS variant of the iPhone from the Indian market, leaving the 8GB model of the iPhone 4 as the entry-level smartphone from the companys portfolio in India. The latest move is very much in sync with their earlier pricing moves wherein we have witnessed them cutting down the prices of previous models as new devices and upgrades come into the market, said Mr. Rajeev of IDC. Its more of a strategy to retain consumer interest in existing devices.

As we all know iPhone is one of the most sought after possession in the recent times. The phone which combines iPod with a mobile phone and wireless connection which enables us to connect to the web has captured the imagination of the people all around the one and lots of them are dying to lay their hands on it. iPhone 3G was released on August 22, 2008 in India, thus allowing the Indians to lay their hands on iPhones legally. Indians who till then had mostly heard about the iPhones and a few had got it from US through some relatives could now legally own it. But as history tells us it was a flop in India. Now that Apple is preparing to release its next version of iPhone, iPhone 3G, we can try and see what went wrong with Apples strategy last time. 1. Pricing: Most people do tell that the high pricing of the iPhones were a deterrent to the people who wanted to buy it. The reason was that the people knew that iPhones were being sold at $199 in US which is equivalent to around Rs 10000/-. So they had expected that it will be around the same level in India too. But what they hadnt factored in and what apple has till now failed to educate is that it is a highly subsidized rates being provided by the carrier and you need to get into a 2 year contract for that with the carrier. The carrier, AT&T in this case, had used the opportunity to lock in thousands of users. Take for example the recently announced one of its best ever spring quarter results in which they added 1.2 million cell phone users and activated 2.4 million iPhones in the quarter. And most of them came in the last two weeks of the quarter when the new iPhone 3GS was released. Also many dont know that you are forced to take up data plan with the carrier leading to its increased revenue. This is one of the main reasons that AT&T subsidizes iPhones in US. But in India, though the people were bound by the contract to the carriers, they did not subsidize the phones, leading to the higher price. Though many blame apple for the high price, I think it should be the carriers in India who should be blamed for it. 2. Carriers: And now coming to the carriers, why were Airtel and Vodafone so uninterested in subsidizing the phone and in providing unlimited data access which Apple wanted. For that let us see how AT&T benefits from being the carrier which enables it to give the subsidy. AT&T is a leader in the wireless provider market in US and it has exclusive distribution rights for iPhones in US. It provides GSM services whereas its closest competitors Verizon and Sprint are both CDMA shops. With the exclusive agreement with AT&T, Apple is barred from developing CDMA version of the iPhones for next 5 years. Thus, making this a much sought after item, if AT&T subsidizes the price, it can attract more users from its competitors and lock them in. Whereas in India, Apple is going in with both Airtel and Vodafone as carriers. And they are the leading competitors in the wireless provider market, at least as of last year. And by simple logic as the prices were pretty much similar with both of them, they knew that attracting users from the other is very hard by giving subsidy as the other would also follow the suit. That way there was no guarantee of them increasing their market shares due to iPhones. Hence, the lackluster attitude of both the companies towards iPhone. It is also rumored that Apple is not happy with both of them as they

did not aggressively market iPhones, but were interested in marketing blackberries and their own phones. The reason for this too would be the same. Regarding unlimited data access, the reason for Airtel and Vodafone to not provide unlimited data access might be the very low ARPU. Since the ARPU in India is very low most of the companies make their revenues in the data access which they provide and Airtel and Vodafone would be very much disinclined towards reducing their profits by providing their main revenue earning service for unlimited use. Although these are the main reasons, there are many other reasons for the failure too, like the non availability of 3G which was the selling point of the phones in US. But I dont feel that that would be an important reason, because not many Indian users would be buying it for the 3G factor, but most of them would be buying it as a novelty factor. So what should Apple do to improve its performance in India? 1. Try and educate masses about the price they see in US and that in India. Although unlocked iPhones in US and other places sell at almost the same or higher prices than in India, not many know it. All they see is the price on the apple store which lists the price at $99 for 8GB 3G phone and $199 and $299 for the 16GB and 32 GB 3GS ones respectively. What they dont see is that an unlocked iPhone 3GS 16 GB costs $600+ and 32 GB $700+. 2. Stick to one carrier so that it has some incentive to provide subsidized rates in India. But again the problem here is up to what level the contract can be enforced by the carriers in India. Especially in a country where there is jugaad in every work, the users can easily get the phone unlocked and use it after buying it cheap. Can something be done to make sure that breaking the contract has the same penalty as in US? This is something for the carriers to think and make their contracts stricter. 3. Instead of selling iPhones at unsubsidized price and being locked to the carrier for a year, it would be better if they could sell the iPhones in apple stores. The people who were not buying it because of the contract (now I know this would be a very miniscule amount) would then consider buying it. At least I have seen many people buying iPhones from Hong Kong where the prices are almost similar (many be a couple of thousands less), just because you are getting an unlocked iPhone legally and for a lesser amount than in India. 4. Now that the iPhone 3GS is being introduced, instead of phasing out the older 3G version in India as it is being rumored now, provide it at a lower price, which could be affordable for the upper middle section of the society. This would allow more number of people to have the feel of an iPhone and as I have seen many of them would be hooked for a long time. And dont give me the reason that Apple wants it to be a niche phone. When they can allow it to be sold at a subsidy (with many plans you get an iPhone without any payment and you pay the amount in installments over the period of contract) in US and can have 2.4 million people buy it in 10 days, does it really want to play to niche game in my view.

Apple is known for launching all of its products extremely late in its product life cycle in India. They have never considered India as an attractive enough market to launch its newest products. The highly successful iPhone 4 was launched in India nearly 1 year after its launch in American and European markets. The same was the case with the first iPad.

Recently Apple launched its iPad2 in India almost at the same time it launched it in the American and the European markets. It is a fact that apple still does not consider India as an attractive enough market to launch its products. In a market like India, where the demand for such product would be a few million, Apple has launched only a few thousand. There is hardly any stock available of the iPad2 in the Indian markets.

The main question that arises is that why has apple suddenly taken a U Turn with its launch strategy and launched the iPad 2 in India so early and that too in limited quantity? In the recent times Samsungs success has given apple sleepless nights. Samsung is the only company in the mobile segment, which has posed a real threat to Apples iPhones

by matching its sales and growth. We must understand this threat that apple feels, through Samsungs launch strategy. Samsung launches its products globally in about 120 countries within a span of one month. Rather than launching its products in different countries in a phased manner, Samsung aims at flooding the global market with its products at the same time. This gives Samsung a wide reach and the ability to gain market share in all countries fast, before its competitors can react. The recently launched Galaxy Tab 10.1 and 8.9 by Samsung are pegged to be the most powerful tablets in the market. Apple fears that when Samsung launches these tablets in the Indian market, it will capture the whole market leaving almost nothing for Apples iPad 2.

Apple very well understands that its products have a cult following. As social status values, iPads are unmatched. A galaxy tab cannot match iPads social status. The statement I have an iPad2 has a totally different feel to it. As Apple had never aimed at launching the iPad2 in India so fast, it had not produced enough iPads for the Indian market. So by launching the iPad 2 in limited quantities it is providing a hope to the customers that iPad2 is available, and they need not take up the galaxy tab. The customers rationale is that iPad2 is there in the market, though currently in limited quantity. They believe that it wont be long before they get their hands on one. This

keeps them from buying the galaxy tab. No matter how Bizzare this strategy adopted by Apple may sound, it is doing wonders for the company. People are holding out just to get their hands on an iPad2. With such an excellent response, it is high time Apple treats the Indian market at par with the American and the European markets as Samsung has. With the growing numbers of high end electronics customers, it is essential that manufacturers consider India as a market to reckon with.

Apple has used both these distributors in the past for products like the iPad, but did not do so for the iPhone as it was concerned that paying third-party distributors would eat into its profit margins on a key product. Due to regulations in foreign investment in the Indian retail sector, Apple hasnt been able to sell its products directly to consumers in India, and instead has to rely on distributors and carriers. This multi-layered distribution model eats into Apples profits, giving the company very little incentive to focus on the Indian market: The companys decision to go through distributors perhaps shows the company is willing to see its margins decrease for now in an attempt to get a bigger toe-hold in India for the iPhone, said G. Rajeev, a senior market analyst with research firm IDC Inc. Samsung already sells its phones through a nationwide network of distributors. Samsung, and Android in general, have seen a lot of success in India, primarily due to the availability of a wide range of handsets in the $200 to $500 price range. The iPhone lineup, in contrast, started at $400 for the iPhone 3GS and went all the way up to $800 for the 16GB iPhone 4S. With the impending launch of the iPhone 5 in India, the prices of older generation iPhones have of course come down, but they still dont come close to the sub $400 Android lineup.