Apple Is Losing India. ​​​​​​​Here's The Comeback Plan

Samsung and Xiaomi are stomping the company in the fastest-growing smartphone market.

- Mark Gurman And Saritha Rai

In Bengaluru’s busy Madiwala neighborhood, a Poorvika Mobile World shop is plastered with posters for Samsung and Xiaomi and filled with inexpensive phones from brands such as China’s Oppo and Vivo. Off to one side is a forlorn display stand with the iPhone 6, 6s, and X, the latter sitting upside down. Despite a zero-interest payment plan and cash-back incentives, Apple Inc. is lucky if the iPhones account for 25 of the 1,000 smartphones the store sells each month, says manager Nagaraja B.C., who goes by one name and initials. “The average budget of a shopper is about 10,000 rupees,” he says, roughly $150. The iPhone SE, the cheapest Apple model, costs almost twice that. For $100, shoppers can get a Xiaomi Redmi 5A with a bigger battery, better camera, and greater storage capacity.

Lost in the hoopla around Apple’s $1 trillion capitalization has been its serious trouble in the world’s second-largest and fastest-growing smartphone market, where it ranks 11th. The company accounts for 1 percent of India’s phone sales and sold fewer than 1 million phones there during the first half of 2018, according to Counterpoint Research, while Xiaomi sold more than 19 million. During a weeklong trip to India two years ago, Apple Chief Executive Officer Tim Cook told just about every employee, politician, and Bollywood star he saw that the country was central to his plans. During a July 31 earnings call, he barely mentioned it. Behind the scenes, though, he’s been working to remold Apple’s failing India strategy, according to current and former Apple employees.