Apple iPad in India: Was

there a way out?

SECTION-B GROUP-4

Introduction

Apple : Product Offerings

MP3 Players
Phones
Laptops
Tablets
Cloud Services
Entertainment

iPad

Various Generations: Latest version iPad Air 2

Runs on iOS Operation System: Latest version iOS 8.4
The main idea was to reduce the dependency on laptops
1st Generation released in 3rd April 2010(US)
In India it was released on Jan 2011
Worldwide production of 1st generation stopped in March
2011 with the launch of iPad 2nd generation

iPad vs Others Tablets in India

Potters Value Chain

Potters Value Chain

Issues relevant to business

processes
Strategies adopted by apple:

Limited No of 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.

Worldwide, Apple ensured users could buy an iPad not only from its own
Retail outlets, but also gave the consumers many options to buy from.
This put an end to the grey market that was importing iPads through
illegal channels, and selling them at extremely high prices with no
warranty.

Issues relevant to business

processes

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.

Issues relevant to business

processes
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.

Why so? Think!

Indian consumers are termed as Laggards in the Production Adoption

Lifecycle for Apple. Why?
Apple had limited distribution channels in India. Why?

Why so? Think!

Apple delayed the product launching in India. Was the decision

deliberate?

Were the Decisions right?

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??

Single Brand FDI restriction in 2011

FDI norms in single brand retail were not conducive
to companies dealing with consumer goods
Apple prefers to have its own supply chain. Was not
possible because of government restriction.
FDI limit in Single Brand Retail 51%
Who will not want a 49% share of Apple India.

The multi-layered distribution

model (In India)
At all these various stages, the intermediaries are
paid commissions which add to the costs of the
final products.
Firms try to minimize the number of intermediaries
to save costs and enhance efficiency.
INDIA
Difficult for a new
venture to get its
products to a
large audience.

US
Its easy for companies to
bypass delivery problems
by working directly with
large consumer-facing
hubs such
as Wal-Mart, Amazon etc

How does Apple drive profit and

volume in other areas?

Contract
Model
Selling apps
, games and
songs

Sell product at less price, but has a two year contract , with locked to AT&T
network
For two years, Apple earns on every MB you use, every minute you call and every
SMS you send.
India lacks the 3G network coverage
Many Network Operators leads to tariff wars
No Subsidized devices to the Indian Consumers
No revenue sharing with Telecom Operators
No bulk sales and lessprofits

Who in India actually buy apps!

Prevalent Piracy
Low digital content sales
Everyone will just get them jail-broken.
Very less Content Revenue for Apple.

Conclusion-The decision was Right!

No Bulk volume sales

No control/apple stores

Equation for
Apple in
India(2010-11)
No revenue sharing with
telecom operators

Less content revenue

Tim Cook WWDC(2012)

I love India but I believe Apple has
some higher potential in the intermediate
term in some other countries.
This doesnt mean were not putting
emphasis in India. We have a business
there and its growing but my own
perspective is that in the intermediate
term there will be larger opportunities
outside (the country).