According to the news report by Bloomberg, Apple Inc. has lost three of its top executives in India as the technology giant is struggling to push up its iPhone sales in the fastest growing smartphone market in the world.
According to sources, the head of national sales and distribution, the head of the company’s commercial channels and mid-market businesses as well as the head of telecom carrier sales have left the company. However, the sources requested that they remain anonymous as this news is not official yet. One of the sources told Bloomberg that the tech giant’s India sales team is now undergoing restructuring to cope with the losses.
The exit of major executives is just a sign of the struggle that Apple faces in India, where high import tariffs inflate the already massive price tags of imported handsets like the company’s iPhones. This pushes customers towards cheaper alternatives like Xiaomi Corp.’s and Samsung Electronics Co.’s smartphones.
Things are made even worse since Apple then resorts to marketing older models of iPhones, which along with the heavy import duties, are expensive and unattractive propositions for customers. The company is not manufacturing any of its latest models within the country, so they are just too expensive to be attractive to the Indian consumers.
Apple’s inability to grow in the world’s fastest growing smartphone market is in stark contrast to the very upbeat pronouncements by the company’s Chief Executive Officer Tim Cook, who describes the Indian market as “very bullish” and even “very optimistic”.
The scenario on ground level, however, is quite different from what Cook has to say. The head of operations, Michel Coulomb, who took over his role in December 2017, has been struggling to make sales, with Apple’s market share in single digits in the country. Despite the fact the Coulomb has a lot of experience in carrier-led sales, his team has not been able to develop strong business relationships. Additionally, the company has been struggling to understand the Indian market, leaving the sales team without a sense of direction.
The situation in India only compounds the company’s problems in other markets too. For example, Apple is also struggling in China, where the company’s latest offering the iPhone X has shown disappointing results.
According to data from Counterpoint Research, in 2017, Apple Inc. sold only 3.2 million iPhones in India, which is just about 2% of the entire smartphone market share in the country. Things are even worse in 2018, where, so far, according to the data, less than 1 million devices have been sold.
According to Counterpoint Research director Neil Shah, this year’s iPhone sales have been very poor, and even if the company manages to have a good second half (which is traditionally Apple’s strongest time), the tech giant will still miss its targets for the year in India.
Despite all the gloomy news, CEO Cook remains optimistic. According to him, India could be the next China (which is Apple’s number two market right now). He is predicting that while iPhones may be too expensive for most in the country, the upwardly mobile young Indians would be more interested in upgrading.
In fact, in a conference call, he revealed that in May this year, India set a new half-year sales record. Additionally, Apple has also increased its activities in India lately. The company has set up an app accelerator as well as mapping center. The company has also set up assembly plants in the country where older models of the iPhone are being put together.
However, according to Shah, this is not enough and the company needs to do a lot more to be successful in India.