Sunday, July 18, 2010

Apple's misery in the emerging markets !!

Apple, the world's most innovative company, is touted as one of the most respectable firm America has ever produced. Without a doubt, Apple's products are revolutionary and always take us into a new era marked by greater sophistication. They create ripples in the markets much before their launch and the tsunami arrives the day they are in the market. Be it iPod, iPhone or the recent iPad, people have tortured their legs standing in ever-lasting queues, to get their hands on the "iProducts". But as much as Apple has succeeded in American and European markets, it has failed miserably in the emerging markets. Apple has failed to sell iMac, iPad and more so iPhone in the emerging markets like India and China. Looking at the potential these two markets possess, any CEO in the world would dream to conquer them. China is numero uno with 634 million mobile users, India is second with 427.3 million. Now that combined is fcuking 1 billion "can-be" customers. Shouldn't Steve Jobs pay attention to these markets which they respectfully deserve? Isn't it a job of Jobs, to multiply the money of his company's investors in whatever way possible?

There are many reasons as to why Apple has failed to make it's mark in these tremendously growing market. The first and the obvious reason is the cost of its products. They are humongously expensive in these countries when compared to the US. iPhone 3G(8Gb) costs around 4 times the cost as available in the US markets. And as a matter of fact, people in India and China are still not rich (despite bragging about 10% growth rate) and understandably would not like to pay such an amount of money when they can buy a bike instead. Moreover, as a part of their cheaper habits, Chinese and Indians prefer to buy Apple's products from US, either when they visit the country themselves or ask their visiting friends to purchase for them leaving their own country's market dry and hapless.

Secondly, there is a lack of aggressive marketing strategy. For no obvious reasons, the company has not shown any inclination towards making its products people's first choice in the emerging countries though they are "competition killer" in nature as they have shown in the American markets. There are no ad campaigns, no massive publicity when their competitors Nokia and Samsung are flooding the markets with the news of their new products and innovations. Apple still remains a company for elite in these countries.

Thirdly, iPhone comes bundled in with a service provider. Recently, there has been a boom in the number of service providers particularly in India which has made mobile usage as cheap as a postcard. Further, these service providers have various cellular plans which are designed to suit various kinds of users. Thus, this binding of service provider with the iPhone restricts the users to avail the services of their choice and advantage.

Fourthly, India and China do not walk hand-in-hand with US when it comes to telecommunications technology. While 3G services were introduced in the American and European markets much before 2005, they are still to be launched comprehensively in India and China. This lag in technological advancement make new Apple products which are designed keeping the latest US technology in mind less attractive in the "still developing" economies.

And last but definitely not the least, tough competition from key players in the cellular markets like Nokia and Samsung, who really understand the needs of the customers in these areas and have built their products to suit them. These companies have also invested heavily in massive campaigning, covering all the segments of the society. The competition has just grown stronger with the entry of new players. And Apple will now find it all the more difficult to sell its brand in China and India unless the governments of these countries decide to cut the duties on imported electronics items sharply.

Apple is still not the "Apple" in the emerging world. Apple might be the "God" of the American and European people but it should not overlook the other half of the globe. Purely in business terms, these market could be heaven for any technology company. American and European economies are on the verge of stagnation or rather decline, thus to keep up with the pace of growth Apple has achieved in the last decade they need to focus more on the countries like India and China providing people in these countries with what they want at a fair price. Apple knows well the power of its killer products, they are better than any of their contemporaries and should use it to their advantage rather than being gratified by their tremendous American and European sales figures.


  1. Awesome post...though you concentrated on India and China leaving out the rest of the emerging countries.

  2. @Anne: Yes, that's because the evidences of Apple's failure in other emerging countries are no different than these two. Moreover, these two countries together account for 40% of the world's population and have more users of electronic items than any other country in this world. Thus in order to keep the article concise and yet effective, i kept my focus on these two giant markets.

  3. Apple has had a great run the stock has gone from just five dollars a share in 1998 to over five hundred dollars today.