INTERNATIONAL MARKETING ASSIGNMENT

Recommended Approach or Ideas to Increase Share of

Apple phones in India

Submitted By:

Akshita Kedia-2014C39
Amit Gupta-2014C40
Munish
2014D09

Sharma-

Namrata
2014D10

Sinha-

Sajitha Nair-2014A53

The Smartphone Market 2015

The worldwide smartphone market kicked off the year 2015 with an expected postholiday dispersion in shipment volume compared to the previous quarter's
unprecedented results. According to data from the International Data Corporation
(IDC) Worldwide Quarterly Mobile Phone Tracker, vendors shipped a total of 334.4
million smartphones worldwide in the first quarter of 2015 (1Q15), up 16.0% from
the 288.3 million units in 1Q14 but down by 11.4% from the 377.6 million units
shipped in 4Q14.
Android dominated the market with a 78.0% share in 1Q15 and Samsung
reasserted its global lead with a renewed focus on low-cost smartphones.

Period

Android

iOS

Windows Phone

BlackBerry OS

Q1 2015

78.0%

18.3%

2.7%

0.3%

Q1 2014

81.2%

15.2%

2.5%

0.5%

Q1 2013

75.5%

16.9%

3.2%

2.9%

Q1 2012

59.2%

22.9%

2.0%

6.3%

Source: IDC, May 2015

Why Market Share Matters?

The reason market share is important to the handset industry is because mobile is a
"Platform Market." In platform markets, third-party companies build products and

services on top of other companies' platforms. As they do, the underlying platforms
become more valuable and have greater customer lock-in.
Building products and services for multiple platforms is expensive, so platform
markets tend to standardize around a single leading platform. As they do so, the
power and value of the leading platform increases, and the value of the smaller
platforms collapses in a platform market, having dominant market share is critical
to maintaining long-term profit share.
Right now, the smartphone and tablet markets are growing so quickly that relative
market share isn't really an issue. But at least in some regions, the market is
maturing more rapidly than most people realize. Therefore increasing the
importance of maintaining ones own market share.

What Apple is doing for their Market share

Contracting with multiple national-level distributors

Partnering with banks to back financing

Offering deep discounts on older models

Providing buyback schemes

Launched cash back schemes along with its Indian distribution partners that
enabled users to exchange their existing smartphone for a new iPhone 4.

Monthly installment schemes that made it easy for the common man to
purchase Apple iPhone.

Buyers dont mind owning an older model if it becomes available at a price

they see value in. Apple has tapped into this by continuing to sell older
models such as the iPhone 5C and the popular 5S in India.

Why Apple is losing its market share

Both Android and Apple are still gaining share, while every other platform is losing
it. But Android is gaining share faster than Apple.

Apple fans frequently dismiss concerns about Apple's market share losses by
making five points:

The mobile market is different than the PC market

Android is hugely fragmented, so it's not really "one platform"

Apple is in the "premium" segment of the market and has most of the
profits--it doesn't care about the rest

Apple's content, app, and services ecosystem is better than Android's

Developers can't make money on Android

Android and Apple continue to dominate the global mobile market, but Apple is
losing (relative) share faster now. With each year that goes by, the competitive
advantage that Apple has with its gadgets and ecosystem is continuing to narrow.
Thereby leaving Apple with only a mere 2% market share of Indias smartphone
sales as on October, 2014. The bottom line for Apple being Market share matters in
platform markets, and Apple needs to give immediate attention to this.

What Apple should really do

Apple should firstly do away or minimize the Multilayer Distribution

in India that really adds to the cost of getting their products to the
Market: Apple ties up with the national, regional and local distributors to get
its products to the final consumers. This costs the company at each stage as
they pays fees to the partners who end up eating into their profitability.
Instead they should avoid middlemen and come up with more direct channels
of selling like they do in the US and Europe. Apple should simply improve
their supply chain, and tie up with e-commerce sites.

Apple should have more Partnerships with Carriers like they have
with Bharti Airtel Ltd; this would enable them to target a wider
market with greater scope for customer purchase: IPhones sales in

China is much larger at present as Apple there is aided by carriers like the
China Unicom and China Telecom who subsidize the cost of phones for their
subscribers, leading to more customer purchases on contract basis.

Develop products Indian customers can relate to more: This can be

done by relaunching 16 GB variants of IPhone 4S and 5C at cheaper prices.
Customers would always want to buy a high quality brand while they pay
lesser. Also enhancing the internal storage options of the phone by providing
slot options for memory would enhance sales for Apple, as IPhone actually
provides for only 12.4 GB in spite of its high prices.

Apples India country head Maneesh Dhir and telecom business chief
Sanjay Kaul should start working on their new Business plan: of
entering smaller towns across India, in an attempt to increase iPhone sales, if
it wants to grow fast in terms of market growth and share.

Apple should take into consideration the declining currency rates

while setting up prices of their phones: Their advertisements should
capture the essence of an IPhone being offered at lower prices in spite of its
top class features. This would enable the consumers to sense a feel of
discount pricing inducing them to purchase the phone due to its longevity
competitive advantage.