Apple (AAPL) Not Likely to Alter Fortunes in India with iPhone 5c
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Price: $165.00 -1.22%
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Dividend Yield: 0.5%
Revenue Growth %: -4.1%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 0.5%
Revenue Growth %: -4.1%
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Amid a push for larger presence in the country, Apple (Nasdaq: AAPL) still has some work to do in India.
According to market data, Apple's iPhone 5c will start at $549 in India. That compares with the initial $99 outlay that many in the U.S. pay after entering into a two-year contract with wireless providers. Carriers in India don't generally offer the same subsidy deal for users due to ultra-light ARPU numbers, Bloomberg noted Tuesday. While ARPU is about $68.49 per month in the U.S., the number gets up to just $1.60 per month in India, meaning subsidies aren't a viable option for carriers.
Samsung is the market leader in India, while Apple ranks a distant eighth. The lion's share of Samsung's device sales come from handsets priced at or below 23,870 rupees (about $380).
India's largest wireless carrier, Bharti Airtel, said about 96 percent of its 191 million wireless subs were prepaid customers, a lower-revenue draw for the business. Verizon Communications (NYSE: VZ) last reported that only about 6 percent of subs in the U.S. were on prepay plans. One Gartner analyst recently said that customers in India can get voice and data packages for around $5, while Verizon's basic voice, text, and data plans start at $40.
But, as mentioned recently, Apple CEO Tim Cook said the company's iPhone 4 and 4S will qualify as a low-cost device in many emerging markets. While Samsung has been adjusting prices of its handsets as the rupee has tumbled 12 percent this year, prices on the iPhone 4 and 4S have remained firm. Apple has also worked to offer payment plans for Indian customers, making more expensive devices more attainable.
While the strategy to offer older models at better price points will keep Apple sales firm, there appears to be no real near-term catalyst for the company to make significant market share gains. Shares of Apple are indicated higher Tuesday morning.
According to market data, Apple's iPhone 5c will start at $549 in India. That compares with the initial $99 outlay that many in the U.S. pay after entering into a two-year contract with wireless providers. Carriers in India don't generally offer the same subsidy deal for users due to ultra-light ARPU numbers, Bloomberg noted Tuesday. While ARPU is about $68.49 per month in the U.S., the number gets up to just $1.60 per month in India, meaning subsidies aren't a viable option for carriers.
Samsung is the market leader in India, while Apple ranks a distant eighth. The lion's share of Samsung's device sales come from handsets priced at or below 23,870 rupees (about $380).
India's largest wireless carrier, Bharti Airtel, said about 96 percent of its 191 million wireless subs were prepaid customers, a lower-revenue draw for the business. Verizon Communications (NYSE: VZ) last reported that only about 6 percent of subs in the U.S. were on prepay plans. One Gartner analyst recently said that customers in India can get voice and data packages for around $5, while Verizon's basic voice, text, and data plans start at $40.
But, as mentioned recently, Apple CEO Tim Cook said the company's iPhone 4 and 4S will qualify as a low-cost device in many emerging markets. While Samsung has been adjusting prices of its handsets as the rupee has tumbled 12 percent this year, prices on the iPhone 4 and 4S have remained firm. Apple has also worked to offer payment plans for Indian customers, making more expensive devices more attainable.
While the strategy to offer older models at better price points will keep Apple sales firm, there appears to be no real near-term catalyst for the company to make significant market share gains. Shares of Apple are indicated higher Tuesday morning.
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