In order to break into the large marketplace offered by India, Apple offered various installment payment plans and deep discounts. This strategy managed to bring to Apple multiple advantages and high numbers of units sold.
According to analyst Sunil Tirumalai, “Apple’s strategy of equal monthly installment and cash-back programs have jump-started of sales in India”. Here, it used to be around 70,000 to 80,000 units per month before the aggressive pricing schemes. Now, the company reaches nearly 400,000 handsets each month.
As it was expected, India’s marketplace was open mostly for low-cost feature smartphones while other expensive products, such as Apple’s iPhone, were out of reach for most of the consumers. Nevertheless, with all those deep discounts and cash-back plans, the iPhone now accounts for nearly three percent of the entire Indian market.
As it was described by analysts, Apple’s “aggressive approach” to iPhone sales in the world’s most populous nation, includes extensive advertising. Besides this, there is the interest-free EMI plan that allows users to put down a partial payment on an iPhone 4 or 4S and pay the remainder over the next 6 to 12 months.
Along with the EMI plan, the 4 to 9 percent implicit discount became pretty popular among customers. “Within a few months, our discussions with handset retailers indicated that iPhone sales went up 3-4x, forcing companies to respond”, Tirumalai said.
In order to attract more customers, in April, Apple added an 18 percent cash discount to the iPhone 4 deal, which neutralized the partial down payment. Moreover, this strategy resulted in an effective discount of 23 to 27 percent, making Apple’s handset more accessible and attractive for Smartphone buyers. It is worth mentioning the fact that these discount plans were designed for first-time Smartphone buyers.
Another attractive discount plan was released to students. Earlier in May, as part of its push, Apple offered trade-in rebates for students who get around 7,777 rupees, which means about $134, off certain iPhone models. This encouraged Indian students to start their Smartphone experience with an iPhone.
Based on the mobile device retailers and distributors, the Credit Suisse’s report offered a preliminary IDC, estimated from February. The report noted that Apple saw a 400 percent increase in sales in India. As it was stated before, all these units sold were related to the cash-back plans, discounts, student offering and the already-famous EMI plan.