Apple Inc. (AAPL)’s Plan to Take India Faces Huge Obstacles

Apple store Beijing

For Apple Inc. (NASDAQ:AAPL), expanding its business is difficult because of the success it already has. Because of their success now, expansion is a big problem for them too. Apple’s expansion in the India faces hurdles.

Thus, Apple Inc. (NASDAQ:AAPL) has chosen to go after increased scale opportunities, to try and keep up with the success the company has enjoyed over the years. The company is pursuing growth both in the current business and potential future markets. However, they face a real challenge if they are to continue growing the iPhone installed base.

Reports from Bloomberg showed the company had bad experiences in India. The firm plans on increasing their presence in the second most populous country in the world, but they have faced great resistance there. The article notes that a consortium of Indian smartphone manufacturers started a lobbying arm called the Mobile and Communications Council. The whole purpose of the arm is to dissuade people from government opinion against Apple manipulations to enter the country.

The opposition from the electronics industry plans to make an argument that colors a picture of conflict of interest between the Prime Ministers Make in India campaign and Apple’s penetration in the country. The Make in India campaign is there to promote domestic manufacturing growth.

According to Sudhir Hasija, chairman of the telecom company, Karboon Mobiles, “Make in India could turn into Dump In India…Even if the refurbished iPhones are priced a bit more than 10,000 rupees ($150) that will hurt our sales because Indians may choose Apple for its snob value.”

This kind of opposition is not surprising coming from India. Only the South Korean smartphone maker, Samsung, and one of India’s domestic suppliers, Micromax, have more than controlling market share if 10 percent. Apple only has a 2 percent of the Indian market share, a situation they want to change actively.

Apple at the moment is only allowed to sell products in India through distribution partnerships with domestic third party retailers. Apple, however, applied to gain full access   to import products into the country, something which would open the floodgates for Apple to penetrate the world’s largest democracy. Chances of them getting import approval are high but when that might be is unknown.

Data collected suggests Apple is bound to enjoy an upside in India. Apple CFO, Luca Mestri, mentioned that Apple sales in India had grown by a massive 76 percent. This compared to China which only had 14 percent sales increase, were Apple has a greater foothold than in India.

Apple’s recent launches appear to be aimed at markets where they value lower priced smartphones. Apple launched the 4-inch iPhone SE, starting at $399.

India has overtaken America to become the world’s second-largest smartphone maker, so expansion into the market is needed for Apple to take advantage of the upcoming market.