Stagnant market pain for Apple, Samsung

Apple and Samsung together usually hold over 90 per cent of the segment during the festive months (October-December) in India.
With the launch of Apple’s iPhone devices and the Samsung Galaxy Note 8, the two behemoths of the consumer technology space are back in the ring to seize both consumers’ attention and market share.

But the dynamics this time has changed from previous years. While grabbing higher market share has always been the main focus for the two, expanding the super-premium (above Rs 50,000) customer base in the country is proving to be a bigger challenge with the segment increasingly growing stagnant.

The premium segment of the fast-growing local smartphone market is the smallest in terms of volume. Increased focus from Apple and Samsung, since the past three years set the ball rolling. From less than 1 per cent in 2012, the above-Rs 50,000 segment has grown close to 2 per cent in 2017. However, growth has slowed in the recent quarters. Experts say, while super-premium flagships such as the Samsung Galaxy Note 8, iPhone 8, 8 Plus and X have been unveiled this season, hurdles still remain.

Both brands together usually hold over 90 per cent of the segment during the festive months (October-December) in India. While market share during the last festive season was in Apple’s favour, with Samsung pulling the plug of its then flagship Note 7, their respective shares are usually neck and neck.

“There is equal opportunity for both Apple and Samsung to sell their flagships in India, as the share of Android and iOS customers in the super-premium bracket is nearly equal. But though both have increased their focus in the local market, as growth in developed markets have slowed, the segment here is not growing either,” said Faisal Kawoosa, general manager, CyberMedia Research.

According to analysts, lack of activity and absence of any significant growth in the feeder segment — Rs 30,000 to Rs 50,000 — is denting growth prospects for the super-premium category. Subdued performance by many brands such as Sony, HTC, and Google, among others, in the feeder segment played spoilsport of late. As a result, Apple, which is looking to expand its business in India, may have to depend on replacement buying this season.

“The segment is unlikely to grow any faster in the near future. Most of the sales will be driven by replacement buyers,” said Tarun Pathak, analyst, Counterpoint Research.

The rivals, however, are not ready to let the other take the lead. Apple is aggressively pitching its entry-level iPhone 8 (priced at Rs 64,000) against Samsung Note 8 (priced at Rs 67,900).

For the first time, Apple has more than 10 models to offer simultaneously this season. And, it has brought in some of the much-desired changes — infinity display, improved camera, fast and wireless charging and facial recognition — in its new models.

However, analysts say Apple will be able to reap the benefits only if it manages to integrate them better as Android users are already used to them. Another hindrance that might dent Apple’s prospects this time is its launch dates. Samsung has already unveiled its device in India and has bagged record 250,000 pre-registrations. But Apple will begin offering the same from September 22 — a day after the Korean chaebol starts delivering Note 8.

And its delivery date is set at November 3 — more than two weeks after Diwali.

Neck and neck

5%  Volume share of smartphones in above-Rs 30,000 segment 

2%  Handsets in above-Rs 50,000 segment, where Apple & Samsung are battling with flagships

10+  iPhone models available in India this season; a record high

8  Super-premium Note & S series devices Samsung is currently betting on

Rs 64,000  Entry-level price of Apple’s new iPhone devices

Rs 67,900  Price of Samsung’s new device Galaxy Note8