Why Apple Fails in India (& Why it Matters)

This video is sponsored by Brilliant. The first 200 to use the link in the description
get 20% off the annual premium subscription. India is home to 1.3 billion people. In just five years, it’ll pass China and
become the most populous country on the planet. And, it shows. The streets are chaotic, markets, overcrowded,
and its economy, bursting with potential. While it’s still decades behind on basic
infrastructure like schools and sanitation, India’s GDP is among the fastest growing
in the world. Which, for companies, means 1.3 billion potential
customers, Many of whom are using the internet for the first time ever. Where Amazon, Google, and Uber struggle to
enter and compete with locals like Baidu and Alibaba in China, they’ve largely succeeded
in India. With one big exception: Apple is almost nowhere
to be found. The iPhone is an unstoppable, money-making
machine, more successful than Boeing’s 737, Toyota’s Corolla, and the entire Star Wars
franchise. And yet, here, it only commands about 1% of
the whole smartphone market. Just in the last year, its government threatened
to ban the iPhone over a disagreement about privacy, Apple reportedly lost three key Indian
executives, and it failed to get approval for an official retail store. It’s safe to say things aren’t going so
well. So, what makes India so different? And what does it mean for the future of Apple? This is the sales miracle known as the iPhone. Apple went from selling 1 million in 2007,
to 11 in 2008, All the way to a record-breaking 231 million in 2015. Turns out people like bigger phones. The trend couldn’t be more clear. But then, something changed. In the last three years, sales have been…
flat. And, if we look at all smartphones, you can
see Apple is no exception. What was 40, or 50, or even 60 percent growth,
has now become zero. Now, if “flat” means consistently selling
200 million premium devices year after year, well, that doesn’t sound so bad. The iPhone isn’t declining, it’s just…
not growing. But Apple, of course, is a public company,
and the stock market is based on the expectation of growth. It’s not enough to make an unbelievable
amount of money. It needs to make an unbelievable amount more
than last year. Which brings us, back to the basics: There are three ways Apple can sell an iPhone. Someone buying their first smartphone, Someone
switching from a competitor, or someone upgrading their current iPhone. The first two have been incredibly fruitful,
and are still responsible for millions of sales. But there are only so many humans on Earth,
And, at least for now, Apple is not in the business of making more. Which brings us to the third category: the
customers it already has. For the average person, two-year upgrades
are becoming three or four, or whenever this phone dies upgrades. Premium smartphone companies are in the business
of making better, longer-lasting devices that will entice more people to upgrade. But that also makes them less eager to upgrade
in the future. It’s a tough game to play. We’ve reached a point where most people
are mostly happy with what they have. In some ways, Apple is too successful for
its own good. Today, it may sell the same number of phones,
but more profit is being made, thanks to the higher prices of the X and XS. Plus, existing users are valuable in more
ways than one – we buy Apple music, iCloud storage, Apple Watch, AirPods, and soon, Apple
streaming video. So, this graph, the company argues, can only
say so much. That’s why it no longer publishes the number
of phones sold. Sure, sales may be flat, but the average selling
price is anything but. The last two years have proven people are
willing to pay eleven, twelve, fourteen hundred dollars. In other words, this strategy is working. But it can’t go up forever. Somewhere there’s a limit. And that’s why emerging markets are, if
not existential, at least very important for the future of the company. So, Apple, in need of customers, meet, India,
in need of phones. 63 thousand Indians are pulled out of extreme
poverty every day. And companies can hardly wait. Now, in terms of raw GDP, India ranks an impressive
sixth place, right behind the United Kingdom. But, adjusted per capita, it’s only $1,939
to China’s $8,827. Meanwhile, the cheaper iPhone XR starts at
$749. And that’s if you’re a lucky American. In India, the price is 77 thousand Rupees,
Or around eleven hundred dollars. And again, that’s the cheaper model. The XS, on the other hand, is upwards of $1,420. Here, Apple’s strategy of raising prices
is backfiring. An estimated 75% of smartphones are sold for
less than $250. And 95%, less than 500. For most people, the iPhone is simply too
expensive. Even the much older iPhone 6 and SE, are sold
at relatively high prices. For that kind of money, customers expect a
brand new phone, not a 3 or 5 year old one. Most Indians don’t even buy smart phones,
but basic, feature phones like the JioPhone, which is effectively free with a small, refundable
deposit. So, the iPhone is a tiny sliver of the premium
market, which is only a small segment of smartphone sales, which, account for less than half of
all phone sales. There’s just not that much pie left. Now, Apple has never purely been driven by
unit sales or market share. For the most part, it’s just not interested
in selling to all price points. But this market share is barely even noticeable. Unfortunately, price is only one part of the
problem. It also lacks brand recognition, Is affected
by a weaker currency, plus tariffs, And even for those that can afford it, the iPhone in
India just isn’t as good a product… It lacks Apple Pay, Apple Maps is, let’s
say limited, and Siri still has trouble understanding local accents. Some of Apple’s most undervalued assets
are its over 500 retail stores across 19 countries. It builds giant glass cubes, renovates historic
theaters, and practically defies the laws of physics. Not because it’s cool, well, not just because
it’s cool, but because they make insane amounts of money. No other company makes more money per square
foot of retail space. And if you have any doubt about that, I dare
you to walk through one without bumping into anyone. But, all this means nothing in India. Here, phones are sold in small, local shops
where brands have little to no control. Not the best conditions for a company which
regulates the height of its tables. And, at least for now, it legally can’t
open a store. The Indian government requires that any foreign-owned
company buy at least 30% of its materials within the country before opening a retail
store. In response, Apple has started manufacturing
the SE and 6S in India, which it may soon do for newer phones as well. In the meantime, Chinese brands like OnePlus,
Oppo, and Vivo, carefully target the Indian market by producing low-cost, locally-manufactured
devices. Ultimately, the reason Apple can’t compete
is simple: it’s not willing to adapt. The company has all the resources in the world,
but unless it makes a significant change in strategy, India will never be the next China. The iPhone accounts for over 60% of Apple’s
total revenue, to continue growth, it has no choice but to do what Apple does best – destroy
its own, thriving product with an entirely new category. Since reaching a one trillion dollar market
cap, Apple stock has been unusually shaky. Sometimes this is significant, sometimes it’s
normal, market fluctuations. And you can tell the difference by understanding
ideas like statistical variance, which you can learn with Brilliant. You don’t wanna panic and sell here, which
is why this knowledge pays off. That’s the power of topics like math, logic,
and machine learning combined with economics. You can see a business from a whole new perspective. If you like learning new things, and, clearly
you do, you’ll love the way Brilliant helps you understand new ideas, not just memorize
their formulas. To get started, go to brilliant.org/Polymatter
and sign up today for free. The first 200 people to use that link will
also get 20% off the annual Premium subscription. Thanks to Brilliant for sponsoring this video,
and to you for listening.

Maurice Vega

100 Responses

  1. If this stuff interests you, you should check out Lei’s video on the same topic https://www.youtube.com/watch?v=Xn3OW45U0e4 and Rene’s (somewhat) related video: https://www.youtube.com/watch?v=mR-DTDPLnoU

  2. Money is one factor but India still has some 2% of population which belong to rich category, they buy premium samsung or oneplus phones but very few go for iphone. Recently samsung launched its foldable phone it went out of stock in 26min ..

  3. iPhones are expensive as compared to other phones with less features and higher price… As well as india has produced lots of phones that are cheaper and more features…

    Price comes first..

  4. Well actually you have to look as India as a time bomb for Apple currently they are not ready for Apple it’s too expensive they are 20 years behind the us in technology so to say flip phones are just begging to emerge many people don’t care for a fancy phone all Apple has to do is wait because India will adapt itself once people don’t have to worry too much about other stuff they will want i phones same thing happen in the us. India is too primitive at this point for people to want all the extra stuff in phones. I say give it a couple years if India does catch up then Apple will definitely be prévalent

  5. Over half of this video is about shit that isn't "Why Apple Fails in India (& Why it Matters)." A better title would be "Apple stock history and an irrelevant side point about how India is involved."

  6. India is a land of ultimate freedom seekers. Hence, iphone will not be successful in India. Because it doesn't allow you to use third party applications or music. Its an American Jail. We don't want that shit in India.

  7. I can buy a new car or I can pay a part of my plots price in my village or ican buy 15 mi smartphone or I can rent a flat for monthly 12500 for a year rather than buying a 1.5 LAKH APPLE PHONE

  8. Because many Indian people buy iPhones from other countries as they are priced less there as compared to indian prices. A huge number of people use them but they wont reflect in Apple's indian sales.

  9. Because APple won't adapt to Indian household prices, it will never become a significant player and will stand to lose at least 100 million new customers. What will happen, is that either Huawei or the cheaper Indian brands will become truly dominant, then as they improve on their technology, quality and price, they will spread out all over Asia, Africa, and Latin America. Apple will survive by increasing the price of their phones as their customer base shrinks, and in about 10 years, iPhones will be sold only in the rich Western countries, but only to the high middle and rich classes. They will become another Ferrari. Smart phones will plummet in price and they would be bought on Amazon with a data plan already included for about $250 per year. The cheapest iPhone will start at $3000.

  10. dear before making video, please do home work.
    you shows wrong face of india.
    according to your information you shows india will never match your status.
    dear come to india, we will show you how many mobile stores here are better then yours .

  11. India: washes clothes in dirty rivers and sucks goat dicks

    This channel: hmmmmmmmmmmmm I wundor y aplep no success herrrrree

  12. Apple has a different market share in India… It is only sold for it's Brand Equity…. The people who can afford premium range go for it as it is an icon just like Rolex

  13. India Is a Price sensitive market if you want to do business here You have to Provide All good spec in a Cheap price tag …. So Apple We don't like your over priced Shitty products

  14. 0:55
    Uber lost Indian market, now everyone uses OLA!
    And Amazon isn't very successful as of now!
    The only success are Google & Facebook

  15. One reason….. because not all of us can afford it….second Most of us will not even buy it if we can afford….kinda We are so complicated…..

  16. Even if someone in India now a days have enough money they will buy one plus rather than apple. … performance and features matter

  17. Well for Indians,they don't have or they don't want to waste extra money over a specific premium brand with less or almost zero advantage over its rival companies ,next everything in apple phone is paid even a song,and again Indians are not so fool to spend money over something which is available for free

  18. if you need help with unlocking your phone ,,message me .. info on my channel ! 🙂 sim unlocking , icloud removal ..etc blacklist removal

  19. All these countries have rules about where the product is made… except for US. If/when it becomes law in the US, companies are gonna be pissed.

  20. My ans
    GDP per capita in India is very low
    We had to 1.5 times than the original price
    Eg: if Apple phone is 1000$ in US we need to pay 1500$ here
    Also massive competition from Low price Chinese mobile manufactures

    We like Apple but we don't need it

  21. good and bad things about apple.
    good: innovation, though personal computer was the idea pretty much stolen from xerox. Many other products were iconic though not entirely original. But Apple seems to understand how to make a complete products out of technologies.
    bad: very bad business ethics. Almost a ripoff company. In a way it punishes its loyal customers ..who are loyal because of the companies inventiveness and taste…If you buy an already expensive product… you are going to spend a lot LOT more to maintain it. Ultimately you will also be forced to go for an upgrade.
    Indians are way too smart for that kind of sh**… trust me

  22. good and bad things about apple.
    good: innovation, though personal computer was the idea pretty much stolen from xerox. Many other products were iconic though not entirely original. But Apple seems to understand how to make a complete products out of technologies.
    bad: very bad business ethics. Almost a ripoff company. In a way it punishes its loyal customers ..who are loyal because of the companies inventiveness and taste…If you buy an already expensive product… you are going to spend a lot LOT more to maintain it. Ultimately you will also be forced to go for an upgrade.
    Indians are way too smart for that kind of sh**… trust me

  23. So basically the video is saying that India is a poor country that can't afford iPhones. But it is not a stupid decision to buy an iPhone when there are so many better options!!!

  24. Isn't it ironic , despite the lack of educational infrastructure as you claim , Indians are one of the most sought skilled workers and have a major presence in silicon valley . Just wondering what will happen when the educational infrastructure becomes adequate ?

  25. One of the main reason Apple failed in India was because of their snobbish marketing attitude, I still remember Apple never released their flagship models in India in a timely fashion and quite often India was one of the last countries to receive the new flagships. On contrast to that starting with Samsung all key Android players and even Nokia and Motorola used to launch their flagships in a timely manner which created a brand loyalty for those technology and product.

  26. Ok I have never bought a phone from a small shop. Heck I even have a iPhone and I literally bought it from a apple shop. I mean sure there are less apple shops but that doesn’t mean there aren’t big shops for electronics like realincce digital. Here one plus and other phones are more popular because it’s not because we are poor it’s because we don’t want to spend that money on a phone. And we can get the one plus which is way less expensive.

  27. I dont agree that apple is too successful for its own good, couple months ago, I want to buy a new phone, but every single consumer experience videos, websites that compares apple phone to that of android equivalents shows that apple is over-charging and its specs just dont compare to other phone for the same price.

    The only thing apple phones has now is
    1) people's inability to adapt to changes (trust me, it aint that hard to change to an android phone, i used apple phone for 5 yrs and changed)
    2) customer's false sense of status by owning an apple phone
    3) blind loyalty without bothering to research beforehand.

    Iphone just aint what it was previously, and they are just losing customers that want to make their money worth the specs that comes with it, not the stupid branding that shudnt mean anything.

  28. Indians are the smartest, most resilient people. They're proving to these companies that they can function perfectly well without buying an overpriced product that offers very marginal improvements over standard phones. The rest of the world would be wise to take the same approach.

  29. Here where I live, iPhone 10 starts at $1,099 but the Oppo Reno Z which performs better than iPhone 10 has a starting price of $549.
    (Currency used; Australian Dollar AUD)

    Note that the price is from Garden City Mall, Western Australia.

  30. I think the this channel is run by a moron.your data about indian internet user is 20 year older pls update your data.if you dont have INTERNET come India we provide cheapest data around the glove.and we are the rank 2nd in Internet use around the world.fuck you????????????????

  31. Apple would have to take a hit and do similar things that China does. They will have to develop a cheap phone under a different brand in the Indian Market and make that phone just a bit better than the other Indian phones but at a bit cheaper price

  32. Dude from where did you get the information that Indians buy mobile from small shop. They have a good knowledge and always compares features of different models before buying.

  33. İ go and watch horrific accidents that reduces these bangas rangas evertime i hear banga rangas population will surpass china by etc etc.

  34. What a wonderfull idea, sell a $1000+ phones in a country that is still dirt poor. The elitist idiots at Apple live in a privilege bubble.

  35. India in YT video starter pack:

    Rush hour railway station
    Random narrow back alley
    Some market street
    Crossroads with traffic
    Taj Mahal/Charminar/Gateway

    So predictable. :/

  36. Let alone india, it is not doing well enough in usa itself. There is no more excitement for their new product launch, which is now days more frequent, sometimes news products in a matter of 6 months.

  37. As an Indian my preference for phones would always be basic phone (because minimalism) > Android > Apple.

    We lack even the most basic infrastructure for more advanced tech, so apple will have to wait. Maybe a century or more at current pace of ground-level development

  38. Most iPhones are sold in USA and western Europe because they have better salaries and money to throw at banal things , the rest of the world is more worried to satisfy their basic needs.
    While in USA the minimum wage is around $20 per HOUR the rest of the world is $5 to 10 per DAY huge difference.

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