Comment | Price cuts aren’t enough to revive iPhone sales, Apple needs to reinvent itself

Sounak Mitra

Last week, Apple announced plans to cut the prices of its flagship iPhones outside the US, the second time since it started selling these gadgets 12 years ago. The decision comes on the backdrop of falling sales in the world’s top two smartphone markets - China and India. But will Apple be able to revive sales by just cutting prices?

A straight answer would be no.

The reason why Apple is losing sales is not just because of the heavy premium it demands, but also because the devices it has launched during the past few years aren’t in sync with consumer needs. The company’s formula of launching a handful of iPhones every September with a take-it-or-leave-it strategy does not work anymore. The failure to adapt is core to its problems in China and India.

One may always argue about the cost factor. Apple’s iPhones come with a massive premium that the company believes it deserves for the experience, a closed ecosystem and the style statement it offers. But the premium segment has now been taken over by Chinese One Plus, at least in India, while the rest of the smartphone market is dominated by Chinese Xiaomi. And, in China, Huawei is the market leader.

In quarter ended December 2018, OnePlus had about 36 percent market share (premium segment) in India, followed by Apple at 30 percent and Samsung at 26 percent, according to a report by Counterpoint research. Apple’s sales in Greater China fell 27 percent to $13.17 billion last quarter making the company change its revenue warnings early January.

Apple needs to understand that one size does not fit all, neither does its ‘Designed in California. Assembled in China.’ theme. One of the key issues that Apple failed to address in recent editions of iPhones for the Chinese market is that these gadgets does not come with seamless integration of local apps, key to the way the Chinese communicate. Thus, it failed to cash in on the users’ habits. This is where  Chinese smartphone companies scored – understanding the needs and habits of local people and offering them what they want.

In India, the story is similar. While there are not too many Apps developed locally in India, the user habits of smartphones are almost similar to how Chinese people use smartphones, especially people living beyond the top metro cities. Localisation, including seamless integration of local languages, is key and that’s where Chinese companies have the upper hand.

If a user does not get at least what she needs, there is no reason why she would be inclined to pay a massive premium for iPhones.

Apple needs to go through radical changes to get back on track. Otherwise, Apple loyalists in India, like in China, will soon move to alternative options.

Last September, Apple introduced dual SIM, something that people in China and India prefer. But it’s too late. Dual SIM isn’t the latest thing that consumers are looking for. Dual SIM was originally introduced by Nokia in 2010 in India, and HTC integrated dual SIM in smartphones back in 2012. Thus, dual SIM in iPhones did not serve any real consumer need.

There’s more. Apple’s country specific plans are formulated in the headquarters in US, and local executives are not given much freedom to take care of issues in local markets. This is exactly the opposite of how Chinese companies, such as One Plus, Xiaomi or Huawei operate even if they get Chinese executives to head operations in non-China markets.

To regain its charm,  Apple should rethink and reinvent.