Apple is stepping up its efforts to attract Indian businesspeople and targeting enterprises implementing Bring Your Own Device (BYOD) as it attempts to increase its share of the Indian smartphone market.
Canadian cell phone maker BlackBerry, which entered the Indian market about nine years ago, has sold more BlackBerry phones in India compared to any other country. Following the launch of its new line of BlackBerry 10 devices it is expecting to penetrate the market even more. But while celebrating its new flagship, the company has threats to worry about.
One of its biggest rivals, Apple, is attempting to increase its Indian market share with a subtle shift in its strategy. After selling iPhones for more than four years in India, a new distribution model comes into play which is helping Apple push sales of iPhones harder in India.
It has now expanded its sales through a number of distributors and premium resellers. “In terms of installed base, currently BlackBerry leads Apple in India. However, the rate of growth is much stronger for Apple than BlackBerry,” said Katyayan Gupta, mobility analyst at Forrester. This is the result of extensive marketing and payment plans which makes it more affordable.
As a result, iPhone shipments have increased significantly in the second half of 2012. Between October and December last year, Indian shipments have almost tripled from 90,000 units in the previous quarter to 250,000 units, making iPhone the second largest smartphone in terms of revenue and the fifth largest by volume in India.
“Apple is primarily growing in the enterprise segment because of the BYOD trend. The scope of a business smartphone has changed from company-buying-and-giving-to-employee, to employee-buying-and-getting-into-organization. This is where consumers have made a choice to go for Apple,” Gupta said. In India, 88% of director-and-above level executive employees choose the smartphones that they use at work and below this level, 80% of the employees enjoy the same freedom.
“It is interesting to note that the business class, especially the executive level employees, are already using Apple devices like iPads and iPhones,” he added. IT decision-makers are now supporting tablets as they are more portable and enhance productivity. This is where Apple earns another point.
“Also, a lot of enterprise mobility applications are being developed for iOS. App development on BlackBerry OS is falling far behind that of iOS.”
“Apple can reach out to large enterprises in India and educate and showcase them the capabilities of Apple products. If they can answer and satisfy Indian organizations about data security, I think Apple will be able to convince IT departments about using Apple in favour of BlackBerry,” Gupta said.
Most Indians can’t afford a phone priced around 40,000 INR. But, with new monthly payment schemes they now can. Through this, Apple is also focusing on upgrading low budget customers into affording high-end smartphones buyers.
Industry experts believe the Indian smartphone market will grow from about 19 million units in 2012 to 108 million in 2016. However, the multi-layer distribution is a hurdle in getting products to market. It adds to the cost and eats the profits, which could be the core reason why Apple has a low market share in India.
Smartphones account for just a tenth of total phone sales in India and more than 90% of cell phone users have prepaid accounts without a fixed contract and poor 3G connectivity.
“We believe,” Gupta said, “Apple will be able to overtake BlackBerry in the Indian market but only in the high-end smartphone segment. In the lower (<INR 15,000) to mid smartphone (INR 15,000-25,000) segment, BB will obviously lead Apple because Apple does not have any product in this segment.”
In the Indian business segment where BlackBerry has long been on top, a chunk of growing companies are now looking to power their mobile workforce with iPhone instead of BlackBerry.