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Apple Restructures India Business To Improve Efficiency, Increase Retail Penetration

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In its bid to strengthen its grip on the currently budget phone-driven Indian market, Apple has made major changes in its Indian business unit. In addition to few leadership changes, the changes include merging of its product divisions and splitting the business into two in order to align it with the retail strategy.

The former head of the division of gadgets, Sanjay Kaul, will now lead the general trade vertical that covers retail outlets which sell products of different brands. In another change, the head of Mac division Satya D will now head large modern retail and e-commerce vertical.

These structural changes are yet another signal of how Apple plans to aggressively foray into the Indian market, which though has been a rather small contributor to Apple’s overall sales and revenues, has begun to pace up, driven by massive price cuts and growing buying capacity of the Indian middle class.

Apple has also been trying to open its premium stores in India and has submitted a proposal for the same to the government. However, it is also reportedly planning to partner with more retail outlets to increase its retail presence and compete with Samsung and other low to medium budget smartphones widely available in the country.

This structure will drive efficiencies and will be centred on go-to-market strategy,

said a person familiar with the plans of the Cupertino giant to Economic Times.

However, an apple spokesperson declined to comment on these reports.

These changes have come amidst the reports of poor profit numbers of Apple in the quarter ended December despite the increase in sales. According to a third party report, Apple witnessed a 60% increase in its sales in the festive quarter shipping 0.8 million iPhones to India as compared to 0.5 million in the same period last year. However, a heavy discounting during the same period also took a toll on its profits.

Clearly, it seems to be a much tougher road for Apple in India as compared to China which has a huge fan following for Apple products. Moreover, the market of China is largely saturated according to many experts whereas there is a vast number of first-time users of smartphones in India that make the subcontinent region a lucrative market for all the smartphone companies.

However, it is not that Apple has fared too bad in the Indian market. In the last financial year, it crossed the $1 billion mark in its sales and posted doubled profits, as compared to previous year. But when it comes to the market share by volume and wide presence, Apple owing to its premium tag still lags behind the low to medium budget smartphone makers.


 

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