Ten challenges Apple CEO Tim Cook will have to overcome in India

While there are signs that India has been taking to Apple, there are some major challenges that the company has to work around.

Tim Cook is finally focusing the energies of Apple in India. Tim Cook is in India, and in the process of visiting various officials. Announcements related to Apple stores, and an incubator program to encourage startups plugged in to the iOS ecosystem are expected. While there are signs that India has been taking to Apple, there are some major challenges that the company has to work around.

10. Refurbished iPhones: Apple's plans to sell refurbished iPhones in India has been rejected. Resale of refurbished iPhones is faced with stiff opposition from other local manufacturers, including Samsung, Micromax, Intex and Karbonn.  Apple has to work around the perception that it's using India as an e-dump for disposing second hand products that will not find value elsewhere. Apple has tried to maintain that these are high quality used phones and meet the stringent quality specifications set by Apple for its new products. It also believes only low quality second hand phones lead to an e-waste problem. The refurbished phones are a good fit for a price sensitive or value conscious market such as India. As far as Apple is concerned, these lower price devices can lead to an upgrade to a higher priced device later on.

09. Slow 4G LTE Rollout: Apple's innovative technological products are dependent on a good 4G LTE network. Tim Cook considers the lack of an 4G LTE rollout as a big factor holding back the sale of Apple devices in India. This problem seems to be in the process of being solved, with major telecom companies deploying their 4G LTE networks. India is expected to have 9 crore 4G subscribers by 2018.

Ten challenges Apple CEO Tim Cook will have to overcome in India

08. Distribution woes: For Apple in India, distribution has always been more of a problem than pricing. Apple has been working to incorporate small and medium retailers as part of its distribution channels. It has been tying up with major retail chains as well. Although the company has increased its retail network significantly, it needs to do more. Retail in India is not heavily credit dependent, which is not Ideal for Apple. In India, the retail is more dependent on cash or debit, and Apple needs to align its sales strategies to the Indian retail scenario.

07. Lack of Contracts: There is a lack of carrier contracts in India, in the same form as they exist in other markets. Contracts help lower the cost of the device. Users prefer to make up front payments, and stay independent of carriers. Reliance has been offering contract like EMI schemes that are bundled with carrier services. There was also an effort to support EMI payment through tie-ups with banking services. While these might seem to make devices affordable, it could also be seen as a tactic that exploits consumer aspirations and burdens users with unmanageable debt. The schemes were popular at times that Apple had to bring in additional stock.

File image of Apple iPhone 6S Plus

The Apple iPhone 6S Plus

06. Apple Service: Service is a major part of the Apple experience, and this is just missing in India. There are apple authorised service centers, but the service experience is not uniform across them. Offline stores often do not offer service for Apple phones sold online. There was confusion on the warranty status of devices used for consumers who preferred to import devices because of the lower prices. While these imported devices did have international warranty, Apple did not offer its international warranty in India.

05. Apple Stores: Apple has tied up with premium resellers before, but has never opened its own iconic Apple Stores in India. A big part of bringing an authentic Apple experience to India is the opening of Apple's own retail stores. The first official Apple Store in India has apparently got the green signal. The government should make an exception for Apple when it comes to sourcing norms, for Apple to be able to do this.

Traders buy the newly-released Apple iPhone 6 and iPhone 6 Plus smart phones from people who bought the phones earlier from the Apple store, at Hong Kong's Mongkok shopping district

04. Lack of Credit Card use: Usage of credit cards in India has always been low. In fact, credit card usage peaked just before the global financial crisis last decade, and has not recovered since then. The Apple ecosystem, and delivery of apps and services is built around an economy that is based on credit. Apple will have to find new ways to tap into the market, and enable users without credit cards to make payments on its ecosystem. Mobile Wallets are a possible workaround.

03. Lack of Apple Accessories: Availability of Apple accessories are a major problem. A lot of hunting is required to get a particular accessory. Tie-ups with retail partners have tended to spin out into their own stores, and apart from a same few docks and cases in every store, the wide range of Apple accessories available in stores around the world are not available in India. We will know Apple has truly arrived when there is a dedicated third party store stocking only Apple accessories.

Apple CEO Tim Cook

Apple CEO Tim Cook

02. Lack of Applications: Although Apple is known for its ecosystem there are two major drawbacks in India. A lack of local applications, as well as a lack of international applications. The list of these applications keep changing, so any examples given may appear or disappear on the storefronts. Local applications and services tend to launch first on the Android, and at times do not get an Apple launch at all. The high cost of entry for publishing on the Apple store is one of these reasons. Distribution of apps is much easier for small teams and solo developers on Google's Play Store. Apple is apparently working on a startup incubator in Bangalore, that will help developers come up with applications and services around Apple products in India.

01. Stiff competition from Android: Call it an emerging market, or a price sensitive market, or a value sensitive market. Android phones dominates the market share, and Xiaomi, OnePlus, LeEco, Micromax have offerings attractive to the Indian market with the right balance of features and specifications. India has also been the focus for these manufacturers right from the beggening, and they were not as late to show their interest as Apple.

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