Apple Reworking Its Distrubtion Strategy in India

Recently, we talked about the new Apple Stores being planned to open in India. For Apple, this is only a step in the right direction for conquering the smartphone market in India. But then, these stores only mark the beginning of that long journey that Apple has to undertake. If indeed Apple wants to conquer the smartphone market, Apple India will have to change some of the operations on a much larger scale. Indeed, Apple is taking such steps and trying to effect some changes in the way iPhones get sold in India.fc1b0f7fa1c9b01e1d1daee20680fae3

The leading importers of IPhone in India are Redington and Ingram, and they handle the bulk of the sales iPhone has in India. Presently, their sales model is pretty much the same as other goods. When the products launch, the launch price does not stay for a long time. Within a maximum of six months, there is usually a 15 – 20% reduction in price, but then Apple does not sell its products that way in other places in the world.

The First-Customer Price Protection model is adopted by Apple in the sale of its products. That is, the prices of Apple’s products do not fall at all. The price only comes down when another version of the product is launched a year later. So throughout the life cycle of the product, the price remains what it was when the very first buyer bought the product. This is done for the benefit of the first buyers of the product so that people who wait a few months after its launch do not have to pay less for the product.

This mode of operation or sale in India is what Apple is looking to change now because a lot of people do not want to buy its products at launch, and this nosedives the expected sales. This is evident during the launch of the iPhone SE which was sold for ₹ 39,000. During that time, with ₹40,000, one could get the iPhone 6S. With just a few extra bucks, one could get a bigger phone.

Although there aren’t many differences in the specifications of the two phones other than the size of the screen, for iPhone users in India, the screen made all the difference. Even Apple didn’t envisage that.

In a month, the prices of IPhone 6 and IPhone 6S rose by up to 29% that year. Even though Apple didn’t influence the increase in price, there was nothing that could be done to salvage the situation. The two devices wouldn’t sell.

Now with new Apple India Stores in the works, this problem will be corrected. This way Apple can gain total control of the sales process in India and make it in line with the sales of its products everywhere else in the world.

For customers and users of Apple products in India, this means the launch price will almost never drop after the launch. So whether you buy the phone on the day of the launch, or two months later, it wouldn’t matter. Don’t look forward to any price reduction except of course individual retailers give discounts from their own pockets but for Apple, the price remains the original price at launch.

However, Apple must know that why the Indians wait to buy new iPhones is because the prices are somewhat controlled when the phone gets launched. If they do no comprehensively review their pricing model in India, the First-Customer Price Protection model might just be dead on arrival, and Apple might end up losing even that group of customers who are willing to dig a little deeper into their pockets to buy an iPhone.

The Editor-in-Chief & Digital Strategist at Applesutra. When he isn’t busy devouring Apple blogs & podcasts, Varun spends his time following tennis (Vamos Rafa!), watching movies (superhero or super scary) or reading books (Audible/Kindle/old school).