Apple: finally making a play for riches at the bottom of the pyramid?

Apple’s iPhone 3GS is now available in India for less than 200 USD (Rs. 9999).

Image via Wikipedia

This represents a price reduction of 50% over the past year or so and might signal a change in strategy. Apple might be finally moving to tap the riches at the bottom of the pyramid and trying to gain a foothold in the fast growing smartphone market of India. As this article correctly points out, the iPhone 3GS is still a superior when compared to the low-end Android phones offered to the Indian consumer. Coupled with its ability to upgrade to IOS 6, Apple might finally have a winner.

Or this might just be another ‘inventory clearing exercise’ as Apple readies for the launch of the iPhone 5. Either way, one hopes that increased iPhone sales in India will lead to an improvement in the Apple Experience and service coverage available in India.

Smartphone Wars: iPhone Trade-Ins

 

 

On the heels of recent news that Samsung has overtaken Apple as the largest Smartphone manufacturer, one is seeing more aggressive marketing. There was a recent deal on Groupon in Hong Kong, which offered a Samsung Galaxy SIII in return for an iPhone 4S plus 90 US dollars. While this seems quite a steal, there were not many takers for this deal. This implies that either folks are not keen on the switch (iPhone 4 s to SIII), or that there are better (cheaper!) trade-in offers available in the Hong Kong market. Note that long-term contracts are not in vogue in this market, hence contract lock-in can be plausibly ruled out as the cause for low uptake of this offer.

 

Image via Groupon (Hong Kong)

 

History of iOS and Android

This infographic, by mylookout.com, details the history (release milestones) of the iOS and Android operating systems. The data includes release milestones, number of activated smartphones using each OS and app availability over time.

See the original infographic here.

The iPhone trails in China (too)

Samsung SGH-i400 smartphone

Image via Wikipedia

Close on the heels of a report that suggests that Apple is loosing the smartphone battle in India, Gartner reports that the iPhone has less than a third of the marketshare of Samsung in the much bigger smartphone market of China.

as Apple tries to build on its 7.5 percent share of the country’s smartphone sales. Samsung controlled 24.3 percent of the market for phones that can play videos and games, according to Gartner Inc.

 

When one considers that China is projected to become the world’s largest smartphone market next year, this should be a cause of worry.

Succeeding in China is important for Apple as shipments of smartphones in the country are projected to jump 52 percent this year to 137 million units, overtaking the U.S. for the first time as the world’s biggest market.

 

While analysts suggest that Apple’s low market share is due to its exclusive partnerships with the smaller two of three major carriers, this does not take into account the price differential between Samsung’s Android based offerings and the iPhone. One could expect that the reasons why the iPhone doesn’t rule in India also hold true in China.

Apple’s partnerships with China’s second- and third-largest carriers give it access to about 34 percent of the nation’s 988 million mobile users, while Samsung targeted the whole market.

 

As I wrote a six months ago, demographics alone can give Apple $68 billion in additional sales from emerging markets – but this is just the tip of the iceberg!

 

In the next 3 years, 400 million people are expected to buy cellphones in India alone. If Apple can get a large chunk of these consumers onto its ecosystem, the future cross-sell and up-sell opportunities will be immense.  There lie considerable riches at the bottom of the pyramid.

Moral of the story – The Exploitation of existing certainties has a potential $68 billion upside, but this pales in comparison to the potential of the Exploration of new opportunities. An ambidextrous approach could see Apple revenues grow many fold!

 

Read more at IPhone Fails to Gain China Share as Samsung Lead Triples: Tech – Bloomberg.

Linking business cards and LinkedIn profiles

LinkedIn has launched an updated CardMunch iPhone app. The app now allows users to scan a business card, add the details to their iPhone’s address book, enrich the information with data from the person’s LinkedIn profile, and take personalized notes.

For the first time, we’ll be connecting the physical world of business cards with the digital world of LinkedIn profiles, and helping millions of professionals everywhere take the world of contacts and phone numbers into the future of professional networking. We’ve also done a major re-haul of the CardMunch experience with particular focus on how we can make outbound professionals more successful and productive.

Image via LinkedIn

Read more at The LinkedIn Blog » Blog Archive LinkedIn’s New CardMunch iPhone App: Reinventing Business Cards «.

 

A link to the app is here.

Google Translate iPhone app now supports 5 more Indic languages

Google just announced that its Translate iPhone app will support five additional Indic languagesBengali, Gujarati, Kannada, Tamil and Telugu. While the Google’s quality of translation for all Indic languages is still quite poor, the support for an increasing number of languages must be lauded. These are sure steps towards the universal translator of lore!

Google Translate for iPhone now supports text translation among 63 languages, voice input in 17 of those languages, and text-to-speech in 24 of them.

Image via Google

Read more at Translate more Indic languages with the updated Google Translate for iPhone app – Official Google Mobile Blog.

Amazon’s new augmented reality app

Amazon’s subsidiary, A9.com has launched a new augmented reality iPhone app called Flow. The app uses visual image recognition and barcodes to detect any product the phone is pointed towards. It then overlays the image of the product with content from Amazon, which includes reviews, ratings, specs, pricing and immediate purchasing options. This will make price comparisons easier and faster, thereby helping to increase Amazon’s sales.

Image via A9.com

Users point to an item and Flow overlays pricing, availability, reviews, media content and other information directly over the item in view.

With Flow, customers can identify books, DVDs, CDs, video games, or millions of packaged household items like a box of cereal. Items can be recognized by pointing the iPhone toward the front cover or packaging, or by the UPC barcodes.

Read more at Flow Powered by Amazon App, Now Available for the iPhone and here.

Why the iPhone doesn’t rule in India

This recent news report stated that Apple has found the going tough in the Indian smartphone market. Smartphones offered by RIM and Nokia outsell the iPhone by a ratio of 1:6 and 1:18 respectively. Analysts have offered two reasons for this “anomaly”. First, it is suggested that India lacks the wireless infrastructure to support the main features of the iPhone. Second, analysts claim that the Indian consumer is not mature enough for luxury products like the iPhone. The iPhone is a phone for the classes, not the masses.

Apple accounted for 2.6 per cent of India’s smartphone shipments in the quarter ended June 30, trailing RIM’s 15 per cent, Samsung Electronics Co.’s 21 per cent and Nokia’s 46 per cent, IDC estimates.

iPhone, iPhone 3G and 3GS

Image via Wikipedia

While the above points may hold some weight, another major issue seems to be that Apple is not offering enough value to the discerning Indian consumer. Apple wants to charge a premium in the Indian market, but the Apple Experience, that it is so famous for, is missing. Let’s elaborate.

First the price premium. The iPhone 3GS retails at 20,000 rupees. That is around $400 as per the current exchange rate and around $1600 as per rough PPP calculations. Compare this with Android, RIM and Nokia offerings that start at less than half the price.

The cheapest iPhone 4 costs $705 at Reliance’s iStore, while the cheapest iPad 2 sells for about $603. In Apple’s US online store, the iPhone 4 starts at $199 with an AT&T Inc contract and the iPad starts at $499.

BlackBerrys under $200 made up 40 per cent of their shipments in India in the quarter ended June 30, said TZ Wong, an analyst for IDC.

Second, the missing Apple Experience. There are no Apple stores in India. If one wants to buy an iPhone, you buy at full price (with reverse subsidy) from a carrier, or visit an Authorized Reseller (which have many locations) or a Premium Reseller (who have less locations). There is no online store. At a typical showroom of an authorized reseller, the iPhone would be one of around 30 smartphones on display. It would be the most expensive smartphone on display. Some of its accessories would not be available for sale at the same site. And one would need to set up the phone on your own computer. If you don’t have access to a computer, well you may have to take it to another location (a Premium Reseller) to get it set up.

If you decide to take the plunge and buy an iPhone, you still don’t get the full Apple Experience. If you need to get your phone repaired, you will need to take it to a Authorized Service Center. The authorized reseller from whom you purchased it cannot fix it for you. There aren’t many service centers going around – for example, only 5 service centers in Delhi fix an iPhone. That’s about 1 service center per a potential 8 million customers (there are 41 million mobile subscribers in Delhi). Once you get to the Service Center, you will find out that they only repair stuff during a fixed 5 hour window, on weekdays. You cannot call them to fix an appointment, you cannot set one up online. Once your drop off your iPhone, they will give you a time when you can come and pick it up. Till then, you are without a phone.

Oh – and by the way, if you are visiting India and your iPhone needs service – tough luck. They don’t honor the warranty on an iPhone that is not purchased in India.

Compare this with the near magical experience in an Apple store and one might start to understand why the Indian consumer is not sold on the iPhone.

However, the Indian smartphone market presents a great opportunity to Apple. It is the world’s second largest cell phone market with 602 million subscribers and 866 million mobile connections. Smartphones are expected to take off in a big way. And with the advent of the iPhone 4S, coupled with a cheap iPhone 3GS, one can expect Apple to start increasing its share of this high potential market (more on this later!).

Smartphone shipments in India are poised to jump almost eightfold, or an average of 68 per cent a year, to 81.5 million units by 2015, according to IDC.

Read more at Tough for Apple selling iPhones in India: IDC – The Times of India.