It turns out giving people money to buy your product — as well as instituting affordable payment plans — works. Apple, which has struggled to gain real traction for the iPhone in India, has seen sales of the smartphone rise by 300 to 400 percent in the last few months, according to data gathered by Credit Suisse. The sudden spike in sales for the device — going from about 70,ooo to 80,000 units sold per month to about 400,000 units sold in May — can be correlated to Apple recently offering payment plans and cash back incentives for local buyers.
Compared to average monthly sales of 70,000-80,000 smartphones before the EMI [equal monthly installment] schemes were offered to consumers in India iPhone sales have zoomed up to stratospheric levels, analysts at Credit Suisse said. “From our channel checks we believe that iPhone sales are nearing 400,000 units per month in India – that is nearly 3% share of handset sales for a single top-end product in a market that has long been dominated by low-end feature phones,” Credit Suisse’s research analyst Sunil Tirumalai said in a note to clients that was accessed by ET.
Despite this recent surge, Apple’s overall share of phone sales in the country is still extremely low. Samsung devices account for about a third of all handsets sold.
But that’s pretty decent progress in a short time. As iPhone sales in established markets have slowed some, Apple has been fine-tuning its pricing and marketing strategies in emerging countries where smartphone ownership has only recently begun to take hold. As it has in India, Apple has used low- and no-cost payment plans to make older model iPhones more affordable in China as well.
But the cashback incentives seem unique in India, a country where Apple devices are considered expensive. Also significant to the sales challenge: the company doesn’t have the same built-in advantage that it holds in many countries in which it operates – there are no Apple Storesat all in the country of 1.2 billion people.
One way to interpret the success of these moves is that this is a market screaming for a device with the cachet of the iPhone name but with a price tag that Apple doesn’t have to keep artificially low through sales and marketing gimmicks.