We're used to seeing the iPhone virtually everywhere here in the U.S., but despite its success all around the globe, Apple is falling behind in India, a key market poised to become the world's third largest this year.
The Wall Street Journal is reporting that Apple has fallen behind in iPhone sales in India, a country poised to become the third largest smartphone market this year behind China and the United States.
Samsung currently dominates the Indian market, a country with "convoluted distribution" and very different rules for retailing have caused setbacks for Apple, who currently makes up only five percent of smartphones sold there compared to 40 percent for its Korean rival.
One big problem is price: Apple's premium products are simply less affordable in India, a country whose 865 million wireless users mostly stick to cheaper feature phones since device costs are not subsidized as they are in the U.S.
Retail is another issue, since Apple isn't permitted to open its own retail stores in India, nor sell iPhones direct to customers through its online store there. Wireless carriers typically don't have their own retail stores either, so devices have to go through a distribution morass before landing in the hands of customers.
As a result, Cupertino shipped just over 252,000 iPhones to India during the last quarter of 2012 -- a number research firm Canalys says is actually triple the previous quarter, but one that pales in comparison to the 19.6 million shipped to China last year.
But things are slowly improving: Apple now deals directly with two national distributors, where it can tightly control advertising, inventory and where the products are being targeted, which includes roughly 2,000 mom-and-pop stores as well as 65 franchisee-owned "Apple shops" in malls and other high-end locations.
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