5 reasons why Apple ain’t interested in India (and vice versa)

August 9 was the promised launch date for the iPhone 3GS in India. Nothing has happened since then (‘end Nov, Sir’ is what the Imagine Store at UB City said earlier this month) and no one is complaining. Save for some murmurs on the blogs, there is an uncaring silence in media. Can you imagine the public uproar if this were to happen in the US – where Apple promises something and does not deliver? The Apple community would have created such an uproar and mainstream media would definitely have made a noise. Sadly for Apple fans, it is different here.

There could be some traction for the iPod and the Mac (the Macbook especially), not without competition though. Several cheaper mp3 players compete against iPod and there are many who see them as offering better value. The Macbook’s pricing and the presence of Boot Camp makes if appealing in India. But it is clear as mud that India is not  a priority market for Apple – especially for the iPhone. What gives?

1. A large mobile subscriber base doesn’t automatically make a market: India may have a 500mn+ subscriber base in mobiles, but most of them are value seeking pre-paid customers. The handsets that appeal to them, especially in the 10k-20k range, are those that offer everything  – a camera, FM radio, chat, video recording and browser. How well each of them function individually and collectively is another issue altogether. They would want their phone to:

• make, receive calls (duh)
• send, receive, forward text
• play music, allow copying of music from a PC, play FM radio
• take reasonably good pictures
• record video clips
• play games

All within a reasonable budget. They see an iPhone as an expensive device that falls short of expectations on one dimension or the other. ‘What, no FM?’ to ‘poor flash camera’, to ‘no flash on websites’ are common grouses – seamless experience be damned. The ‘ipod-plus-phone-plus-internet device’ concept is strangely unappealing to those who seek everything within limited budget.

2. Poor penetration of credit cards: the biggest barrier to ‘iPhone killers’ abroad is the thriving ecosystem called Apps. With 80,000 apps the claim ‘there’s an app for that’ rings true for them. The relatively poor choice on the Indian iTunes store coupled with low credit card penetration in India is a huge dampener.

3. Value mindset: India is a value conscious market. In several product categories, the player who is seen as offering the best value, gets the share of wallet. That doesn’t necessarily mean lowest price. If the consumer sees value, shelling out just a little extra isn’t a problem. If. And that’s a big if – if the extra value is communicated clearly. The Mac and the iPhone suffered most on this count. The Mac was seen as a niche, graphics design machine earlier. In advertising agencies, Macs were perhaps the only machines used for Art-related work in the early ’90s. And then PCs came with faster processing, monitors came with better resolution and software piracy was quite rampant. Combined with pricing policies and lack of easily available pirated software, Macs became a losing proposition for corporates in the creative area. Even today, the average CTO and the CFO would come from the mindset that getting ‘2 PCs for the price of an iMac’ is always a better option.

For the average consumer, the price gap between a Macbook and comparable PC laptops may have reduced of late. The buying decision doesn’t start from the question: ‘what am I seeking from my laptop?’ but starts from the question: ‘how much can I pack in for this price?’. If the question was the former – no downtime, fast bootup, graphics editing etc., could be answers. The latter question automatically rules out a Mac. For a large part of the market which may even considering a Mac, the question: ‘what can a Mac do, that a PC can’t‘ remains unanswered or wishy washy. Therein lies the rub. That is a failure of marketing. Apple has not been able to communicate it’s positives of seamless performance, stability and a host of value added software that come free with Macs. Unless that is addressed, Apple will be seen by the average consumer as an expensive, poor-value toy.

4. Competitive disadvantage: among mp3 players, iPod still retains a sheen in India. What worked? Products that addressed the entry level (Shuffle, Nano), pricing (it has become increasingly affordable) and first-mover advantage. That is not the same with iPhone or Macs. Thanks to the monumental failure of iPhone in India thus far, the breathing space given to competitors has helped them get their act together. Today, the smartphone seeker in India sees a touchscreen mobile as passe. Phones that can do ‘this, that and get the T-shit’ are common. The superiority or differentiation an iPhone can bring in – seamless integration, GUI, the App Store are lost in the white noise of competitive claims, poor iPhone marketing and pricing. Plus, the likes of Nokia and Microsoft enjoy a far stronger equity in our markets compared to some markets abroad.

5. Pricing: thanks to Government policies, Apple’s pricing was traditionally way out of whack with what the PC industry could offer. That perception will stick for  a long time. And with iPhone being launched without a subsidized pricing, that perception is even stronger.

In business circles you may have heard the ‘There is a gap in the market. But is there a market in the gap?‘ question. Apple is perhaps unable to find an answer to the second part of the question. And the consumer isn’t believing the first part of the question. What a pity.