1

Page

iPad Sales in India

Was there a way out?

Submitted By:
Ravish Malhotra (150201067)
Rishi Chadha (150201068)
Rohan K. Madrecha (150201069)
Romit Jain (150201070)
Sahil Kamboj (150201072)
Sai Krishna Teja (150201073)
Sambit Roy (150201074)
Sanchit Kalia (150201075)

S.No

Topic

Page

CONTENTS

1. About Apple
2. Pad v/s other tablets in India in 2011
3. Porters Value Chain
4. Supply side Value Chain of Tablets
5. Role of MIS in the process of iPad launch
6. Advantages of MIS
7. Three levels of organisation
8. Strategies adopted by Apple
9. Strategic and Managerial issues
10. Decision Making methodologies of Apple Inc.
10.1 Single Brand FDI restriction in 2011
10.2 The multi-layered distribution model (in India)
11. The equation for Apple in India in 2011
12. References

About Apple

Page No.
3
3
4
5
6
7
7
7
8
9
11
12

Page

Apple Inc. is an American multinational technology company founded by Steve Jobs, Steve
Wozniak, and Ronald Wayne on April 1, 1976, to develop and sell personal computers. It
introduce iconic products such such as; Mac series of computers, iPod media player,
iPhone smartphone, iPad tablet, and Apple Watch smartwatch which is the latest addition to
its product line.
It has the distinction of being the world's second-largest information technology company by
revenue after Samsung Electronics, and the world's third-largest mobile phone maker.
The first generation iPad tablet was released in the US on 3rd April 2010. The main idea
behind its introduction was to reduce the dependency on computers. There have been various
generations available, the latest being Apple iPad Air 2.
Ipad v/s other tablets in India in 2011
Categories

iPad 1st Gen

Samsung Galaxy
P1000

Dell streak

Release
Date(India)

January 2011

November 2010

October 2010

Camera

3.15 MP, LED Flash

5 MP, Dual LED

Flash

Loudspeakers

Yes

Yes, with stereo

speakers

Yes

Operation system

iOS 4
upgradeable to
iOS 5.1.1

Android
3.1(Honeycomb) +
Touch Wiz

Android 1.6(Donut),
upgradeable to
2.2(Froyo)

Screen Resolution

132 ppi

149 ppi

187 ppi

Battery

6600 mAh

7000 mAh

1530 mAh

Chipset

Apple A4

Nvidia Tegra 2 T20

Qualcomm
QSD8250
Snapdragon S1

CPU

1 Ghz Cortex A8

Dual Core 1 Ghz

Cortex A9

1 Ghz Scorpion

Memory

16/32/64 GB, 256

16/32/64 GB, 1 GB

16 GB, 512 MB

Ram
Page

MB Ram

Ram

Porters Value Chain

A value chain is a set of activities that a firm operating in a specific industry performs in
order to deliver a valuable product or service for the market. The concept comes from
business management and was first described and popularized by Michael Porter in his 1985
best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.
In Porter's value chains, Inbound Logistics, Operations, Outbound Logistics, Marketing and
Sales, and Service are categorized as primary activities. Secondary activities include
Procurement, Human Resource management, Technological Development and Infrastructure.
Primary Value Chain
Activity

Corresponding Firm Practice, Policy or Procedure

Inbound Logistics

Finance - Apple gets a detailed accounting of the price quote

provided by the manufacturer.
Exclusivity - Apple reates exclusivity agreements with its
suppliers in exchange for volume guarantees

Operations

OEMs manufacturing Scale Apple has outsourced most of

its products for manufacturing to companies based out of
countries having less labor cost.
Product Design Apple design and conceptualize there
products internally

Outbound Logistics

Apple Stores Apple salespeople being more knowledgeable,

and Apple stores being more appealing, aesthetical and practical
has lead to Apple being the best in the sales per unit area
category with $ 16 Billion sales globally in 2011. Few stores
have won various architectural awards like its Manhanttan store
in 5th Avenue. Apple has 453 retail stores in 16 countries and an
online store which caters to 39 countries.

Marketing and Sales

Apple sales has mostly flourished due to word of mouth. After

the release of iPod in 2001, it was termed a failure for the first
two years because the sales had picked up only from the 3rd year.
WWDC Apple was the first company to acknowledge the

5
Page

need of developers by initiating the first ever Worldwide

Developer Conference in 1995. Many major products have been
launched during these conferences.
Customer Service

Apple has an exemplary customer service. For example

whenever there is a major hardware or software damage to your
device, Apple makes sure they are replaced

Firm Infrastructure

Deliver the Best Quality Apple has always believed in

delivering the best product
Innovation Apple has been pioneer in innovating in the
technology space

Human Resource
Management

Selective Hiring People who were talented and were aligned

to Apples vision
Employee Benefits Retaining the best talent in the industry

Technological
Development

iPod Launched in 2001

iPhone Launched in 2007
Apple spent $2.4 Billion on R&D in 2011 as compared $1.8
Billion in 2010
Patent filings Apple keep filing new patents for new
innovations for example Swipe to Unlock

Procurement

Apple has always believed in procuring high quality raw

materials, tools or services. For example even with Samsung
being its biggest competitors it outsources the display from
Samsung. Also the Gorilla Glass display which is now in every
phone was first introduced by Apple in iPhones which was
procured from Corning Inc.

Supply side Value Chain of Tablets

Chipset & Other Component Providers

Chipset vendors manufacture processes used in tablets such as GPU, Processor etc.
Hardware Components include Screes, displays, Memory, Battery etc.

Operating System Providers

Page

Operating System manufacturer develops OS for Tablets along with enabling third
party apps so as to used by the users.
Apple and blackberry manufacture their own OS. Google, Microsoft License their
OSs to other Tablet manufacturers.
Integrator

Operating System manufacturer develops OS for Tablets along with enabling third
party apps so as to be used by the users.
Apple and blackberry manufacture their own OS. Google, Microsoft License their
OSs to other Tablet manufacturers.

Device Makers/OEMs

Manufacture and launch Tablets in various global markets.

Carriers/Retail Channel

Carriers provide the necessary services that complement the manufactures devices
In some cases carrier partner with OEM(s) to launch specific services solely for users
of those OEM(s).

ROLE OF MANAGEMENT INFORMATION SYSTEM IN THE ORGANISATION

TECHNOLOGY

PEOPLE

MI
S

DATA/
INFORMATION/
BUSINESS
INTELLIGENCE/
KNOWLEDGE

The role of management information system or MIS in any organization is to

inter-connect the three resources i.e. People, Technology, and Data/Information to create
a viable or feasible plan of action, in this case, the decision by APPLE Inc. to not have
the iPad launched in India at the same time as USA.
People- Being the employee base and customer base in India;
Technology- iPad was a new product ;
Information -1. Peoples reaction and expectations for tablet functions;

Page

2. The laws, rules and regulation for retail, exports, etc.

Advantages of MIS
1. Preparing the SWOT analysis was eased up by the prompt availability of different
records and reports, like financial statements, employee records, etc.
2. Efficient tool for planning action and strategies for a market.
3. If effectively managed, the customer data can help the company in marketing and
sales promotion.
The three levels of organization for decision making-

Strategies adopted by Apple

Limited variants were provided to ensure consumers mind were not plagued which
may led to indecisiveness.

Focused on the usage through its applications in various industries. E.g. NASA app,
University of Cambridge app.

Users were ensured by Apple that they could not only buy from the retail outlets but
from many other authorised stores. This strategy stopped the grey market from
importing iPads through illegal sources, and selling them at very high prices with no
official warranty.

The iPad not only created business for itself, but also developed an entire ecosystem
around the product and its applications. More than 140,000 applications were
developed for Apple, including video chat and live TV.

Strategic Issues:

No retail presence in India made Apple lose one of the key components of its value
chain: Customer Service.

Prices of other available tablets were low. The transportation of goods from
warehouses in the U.S. to India could have been reduced if they had set-up a
warehouse in India. This could have further reduced the price of iPad.

Apple could not get the first mover advantage in India. It delayed the launch of iPad
in India by nine months from its launch in the US.

Apple used a limited options approach when it came to providing choices for its
customers. Apple launched both the variants of iPad in India the 3G and Wi-Fi
versions, the black and the white color option, and complete storage range. This had
been a key factor in its success story.

Page

Managerial Issues:

Promotional videos were predominately featured children, college students where

actually 50% users were professionals.

Why India became a Laggard?

The excess demand in the market is cited as the main factor behind the delayed launch
elsewhere in the world.

The price sensitive Indian market looked forward to owning a device with numerous
positive attributes and a great utility value. Apple could manage only 18 percent
market share in India by the end of 2011, in contrast to its success worldwide where it
was top selling tablet.

Gartner projected Apple would have a 73.4 percent market share worldwide for
tablets by the end of 2011, compared to 83 percent in 2010.

9
Page

Decision Making Methodologies of Apple Inc.

The decision making in a company is basically done on three levels namely

The strategic level

The managerial level
The operational level

In this case study all decisions have been taken at the strategic level only. Further we shall
see that the decision making process is a six step process which is done in the following
procedure

Problem identification

Data collection

Solution generation

Solution test

Solution selection

Solution implementation
There are few questions which can be raised when we talk about the decisions took by the
strategic management team of Apple particularly during the launch of Apple IPAD in 2011.
Consider this

Indian consumers are termed as Laggards in the Production Adoption Lifecycle for
Apple. Why?

Apple had limited distribution channels in India. Why?

Apple delayed the product launching in India. Was the decision deliberate?

All these questions ultimately questions the decision making methodologies adopted by
the Apple.Were the decisions taken by the Strategic management Team of Apple
correct??
The decision of not considering India in the Priority list of the IPAD market of India was
correct to the some extent. Here are few points which we would like you all to observe to
finally reach to a conclusionSingle Brand FDI restriction in 2011

FDI limit in Single Brand Retail was 51% in the year 2011.FDI norms in single brand
retail were not conducive to companies dealing with consumer goods. This makes
difficult for the companies to do business in India.

Who will not want a 49% share of Apple India? Which Indian Mobile Company is
actually has the potential to own 49% partnership in Apple India.

Apple prefers to have its own supply chain. This was not possible because of
government restriction in FDI investment. Apple was not able to open any store in
India due to this government restriction.

The multi-layered distribution model (In India)

Page

10

In India, because of fragmented distribution networks, its difficult for a new venture to get
its products to a large audience. In the US, innovative companies can bypass delivery
problems by working directly with large consumer-facing hubs such as Wal-Mart and
Amazon which allows them to quickly and efficiently reach early adopters.
At all these various stages, the intermediaries are paid commissions which add to the costs of
the final products.
Firms generally try to minimize the number of intermediaries to save costs and enhance
efficiency.
How does Apple drive profit and volume in other areas?
The telecom operators subsidize the device for end users and generate money by adding
customer to use their service for a year or two. But the 'contract model' for tablets in India is
virtually non-existent that force the company to compete directly with each other in the
extremely price-sensitive market.
India is a nation with per second billing, very less 3G usage and network connectivity and
tough competition among the network operators like Airtel, Idea etc. are not something that
excites Apple. How will they share revenue with apple, they cannot give subsidised devices
and hope to make money later. So, no bulk sales and no profits. In other words Apple loses
the bulk volume of India.
Apple earns its revenue by selling apps, games and songs. No one in India actually buys
applications. Everyone will just get them jail broken. Piracy in India is prevalent which leads
to decline in the profits for Apple.

11
Page

The equation for Apple in India in 2011

No control/apple stores
NO Bulk volume
Equation for
Apple in
India(2010-11)
No content revenue

No revenue sharing

Hence keeping all the aforementioned points in mind we can safely conclude that all the
strategic decisions taken by APPLE INC. were not wrong but the conditions in INDIA were
not suited to their style of working. Also iPad being a relatively new product at that point of
time, they could not jump onto the international market at once and came to India after
testing the waters, hence causing the delay. Also the lack of Wi-Fi and 3G technology in India
was a major reason for iPads not doing as good a business in India as in the rest of the world.

12
Page

References

http://allthingsd.com/20111107/apples-share-of-the-2011-tablet-market-75-percent-or-more/
http://www.gsmarena.com/compare.php3?
idPhone1=3370&idPhone2=3828&idPhone3=5053&sSearch3=ipad+A1337
http://www.slideshare.net/shahirwan82/porters-5-forces-model-and-value-chain
http://www.slideshare.net/farranadia91/porters-40398359

http://www.cultofmac.com/262972/dont-look-now-comes-india/
http://www.slideshare.net/naseer9848/apple-case-study-report
http://www.slideshare.net/raboz/strategic-management-at-apple-inc?related=2
http://www.scribd.com/doc/123241212/Apple-iPad-In-India#scribd
http://www.academia.edu/8872688/The_benefits_of_Using_Information_Systems_in_Business
https://www.apple.com/in/pr/library/2011/
http://www.dnaindia.com/india/report-i-love-india-but-not-its-distribution-network-apple-ceo1719714