Lost Opportunity | How Apple got its strategy wrong

IPhone’s launch in India has been dubbed the biggest failure of a top-notch brand from a well regarded company in recent times. Two months after the dust over the launch and the subsequent wave of disappointment has settled, it’s time to take an objective look at what actually went wrong with iPhone in India, given that it has been a runaway success in most other markets it was launched in.

Unlike the initial argument that it was the steep price tag that queered the pitch for iPhone in India, many analysts, say there is more to the debacle than just the pricing. “Besides a very high price tag, one main reason behind iPhone’s failure in India is that there was a very weak link as far as consumer confidence was concerned,” says Anshul Gupta, senior research analyst, Gartner Inc., an information technology research and advisory firm.

Apple’s rivals in India, industry observers and analysts say that a flawed sales and distribution model and communication failure were the biggest reasons behind iPhone’s debacle. “A brand like Apple need not be told that an iconic product needs iconic advertising, a solid marketing push,” says Prathap Suthan, national creative director of advertising agency Cheil Communications India. “The company failed to strike a connect with Indian consumers. That, according to me, is their biggest failure and it may have repercussions for them in future as well. Whether they sold enough numbers or not is secondary.”

India not a priority market?

Selling huge numbers in India was not even Apple’s game plan, it seems. Around the time of its launch, the company had said it hoped to sell 10 million units globally by December, whereas in India, it would ship 100,000 phones by December 2009. Clearly, Apple wasn’t expecting big sales from the market.

Yet, what is surprising is that the company didn’t even manage to achieve this target. While Apple’s spokesperson in Singapore, Malini Mitra, refused to share any numbers, several people who track handset sales in the Indian market said the company had imported around 50,000 phones at the time of the launch but had only managed to sell around 11,000 units so far.

Analysts argue that by downplaying India, the world’s second largest and fastest growing telecom and handsets market, Apple may have missed not only a big opportunity to sell one of its blockbuster brands but also to lay the ground for its future products. “Around 120 million handsets are sold in India every year and, of these, almost 4% to 5% are smartphones. Nokia has around 60-70% share of this market,” says Gartner’s Gupta.

Source: Livemint