On a conference call following Apple AAPL +5.41%‘s release of quarterly results Tuesday, the highlights that stood out were Lower average selling prices, lower gross margins and higher iPhone sales. On the call, management made many positive pronouncements that deserve further digging.
India Up 400%
Cook said that sales in India were up 400%. Further, sales in the Philippines were up 140%, and sales in Turkey and Poland were up over 60% each. On the surface this sounds very positive until one considers what CEO Tim Cook did not say.
Until recently, Apple did not put its marketing and distribution muscle into these markets. For example, there were no Apple Stores in India. Distribution partners did not provide high visibility to iPhones in India. Further there were no good financing options available for Indians to shelling out Rs 45,000 (about $800) up front for the latest iPhone, a large sum for an average Indian. India’s per capita income is only $1219. Apple had a very small share of the market. Even when counted by revenues, which gives advantage to Apple because Apple has expensive products, Apple iPhones had only 3.9% share of Indian smartphone market a year ago.
Finally Apple woke up. It took out full page ads in Indian newspapers. It made arrangements for consumers to pay only one third of the price up front and the rest in monthly installments. It recruited new distribution partners. There was pent up demand because Apple did not do a good job with these markets until recently….Read more at Forbes
