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January 23, 2008

business

Opinion column: Why doth thou ignore Asia, O mighty Apple?

Posted Jan. 23, ’08, 12:00 PM PT by Aayush Arya
Category | Business

Apple AsiaRight off the top, I’ll tell you that this is opinion column is related to Apple’s presence in Asia, or specifically the lack thereof, and the attitude of Indian customers towards the company. If that sounds less than interesting to you, please feel free to skip ahead to the next entry, where you’ll find no mention of Asia, India, or naked dancing tribes. However, if you want a little glimpse into the Indian perspective towards Apple Inc., grab a mug of coffee and make yourself at home—this might take a while.

When I learned that the iPod touch’s January software upgrade can only be purchased through the iTunes Store, my first thought was “what about Indians? What about the residents of all those other countries which do not have the iTunes Store?” An article on CNET Asia by Victor Cheung confirms my suspicions: As of right now, only the residents of twenty-two countries, those that have their own version of the iTunes Store, can buy the iPod touch software upgrade.

Apple customers in Asia, apart from the Japanese, have always had to suffer second class treatment from the company. Whenever Apple launches new hardware, we have to wait for at least three months before the product reaches Indian shores. There are no Apple Retail Stores or even a functional Online Store in India; customer support is good but a far cry from the exceptional quality that Americans enjoy; Apple TV customers in India cannot rent movies; we’ve been waiting for the iPhone since forever; and, to add insult to injury, Apple products, which are already notorious for being on the expensive side, are sold at a huge premium in our country.

I realized the extent of the extortion yesterday when the MacBook Air appeared on the catalogue-only Apple Online Store (India) for a mind-boggling price of Rs. 96,100. At the current conversion rate, that amounts to $2430, which means that we’d be paying a premium of about $630 for the same machine. To put things into perspective, you can buy entire notebooks for $630 in India and for a price slightly higher than $2500, you can buy a whole car.

I don’t know who decides the Indian pricing for Apple products, but I am sure that whoever they are, they’ve got it all wrong. Apple does not have a strong presence in India and the product prices are a major reason for that, along with the fact that they do not advertise any products in India at all, including the iPod.

India is different from America: This is not a country where people will happily pay $19.99 for a software upgrade for their recently bought iPod touch and they will definitely not be paying Rs. 96,000 for a notebook that, for all intents and purposes, can only serve as an extension of their existing desktops. When potential customers walk into the Apple Authorised Reseller showrooms in India and enquire about the price of the “world’s thinnest notebook”, no amount of thinness can stop them from laughing at the price or staring blankly ahead, unable to comprehend what they’d just heard.

I was looking forward to buying the MacBook Air and was willing to pay somewhere between Rs. 70,000 to Rs. 80,000 for it, which would already have been quite a substantial amount for a sub-notebook, but my hopes have now been dashed. In fact, I’m now worried about what price the iPhone will command when, and if, it is launched in India later this year. I was expecting it to cost somewhere between Rs. 20,000 to Rs. 25,000 but I can’t say that I would be surprised now if it was launched for a price closer to Rs. 45,000.

Out of all the technology companies, such as Microsoft, Dell, HP, Lenovo, Toshiba, Panasonic, LG, Asus, Acer, etc., Apple has the smallest network of retailers and distributors, highest prices and no advertisement of any sort. I am not exaggerating: 99% of computer buyers in India don’t even know what a Mac is. Except for college campuses, you hardly ever see people strolling with a pair of white earbuds plugged into their ears, tuned into their iPods. For the few Apple customers in India, it is a disheartening situation.

If Apple wants to have an appreciable amount of success in India and other Asian countries—and I hope they do—they have to come to terms with the mindset of Indian consumers. India is a country of low incomes and limited budgets and pricing their products at levels far out of the reach of the average Indian consumer is going to get Apple nowhere. Even rich consumers, in fact, find themselves shying away from paying huge premiums on Apple products when they can clearly see decent alternatives from other companies being sold at significantly lower rates, sometimes as much as half of Apple’s prices.

I know this rant won’t change anything, but it feels good to be able to share the Indian perspective with our readers from America other countries. Feel free to chime in with your thoughts: I’d love to hear them.


21 Comments

Goobimama said:

Right on! Doesn't Apple realise that we are a billion people by ourselves? Sure most of the Indians are too poor to afford to buy music, but it can't hurt now can it? One would think digital downloads would have a very efficient distribution model considering that the store doesn't need to be directly located in the country.

One more thing you forgot to mention about the prices in India. We earn much less than the US people do! So affording a notebook is like really out of the question. Even a $1800 MBA will be relatively far more expensive to an Indian that it will to a person in the states. To top it off they add $650 to that.

(Minimum wages in States = $7 per hour.
Minimum Wages in India = $3 per day.)


January 23, 2008 12:56 PM
T.S. Melo said:

Well,

If you find that your situation is ugly, try living in Brazil... No Apple Stores whatsoever; technical support is incredibly lame (although there are rare exceptions); and the price is hard to believe (yet totally true):

MacBook Pro 15" (base model): US $1999 (AppleStore USA).
MacBook Pro 15" (the same model as above): US $4.899,82 (www.americanas.com.br a retail giant from Brazil).

BELIEVE IT OR NOT, THIS IS NOT A MISPRINT...

January 23, 2008 1:21 PM
edesigned said:

Thanks for the article Aayush. Some of the things you highlighted apply in Australia as well.

Four years ago, at a Apple presentation, I asked the speaker from Apple when would we be able to purchase photo books through iPhoto in Australia. He dismissively said about three months. We still don't have that option 4 years later.

Best wishes
edward


January 23, 2008 1:53 PM
felipe said:

Yeah, that sucks!!
I live in Brazil and we have the exact same problems here!!!

C'mon, Apple, all I ask for is a brazilian iTMS and lower prices.

The 8GB iPod Touch here is R$ 1.099, or US$ 610!!!!!!

January 23, 2008 2:04 PM
Blackrider said:

Yep, the same applies here in small Slovenia. :) Things are slowly getting better, but we still don't have an offical Apple Retail or Online Store, or just a miserable access to the iTunes store. And we are currently on the head of the presidency of the EU... Lame.

Oh, btw Aayush, you can however still use the iTunes Store by means of iTunes Gift Cards. I have been doing it for some time, and it works. You can get full access to the US store, even if you live in Slovenia or lets say India. ;) You just need a Gift Card and pick up an immaginary address in Bel Air or somewhere. ;)

January 23, 2008 2:33 PM
lorem ipsum said:

Thou hast attempted to conjugate a verb most tricky:

thou dost
he/she/it doth

http://en.wiktionary.org/wiki/dost
http://en.wiktionary.org/wiki/doth

January 23, 2008 3:15 PM
pumpkinwhite said:

Didn't Apple sign a deal with Reliance some time ago regarding opening of retail stores in India? I remember reading about it a few months back.

Considering the size of indian market and the economy growth I cannot understand why Apple doesn't have local presence there when international companies trying to sell us everything from bar soaps to cars.
I.T. being the biggest export from india, coupled with a strong corporate culture (at least in major cities) selling computers should be obvious.

I am an Indian student in US. A few days ago an american colleague expressed surprise during a discussion on my vacation shopping saying "You have Levi's in India?". I laughed saying we have "everyone but Apple".

I bought a macbook pro for my dad last summer and took it to India. When the broadband company people came to set up the internet, one of them looked at the comp and said "That is Vista right?" :).

January 23, 2008 3:24 PM
pumpkinwhite said:

btw Aayush - In case you don't have friends traveling regularly from US to India, and you need to buy Apple goodies at the US prices let me know (I suppose you can view my email id from the comment entry fields). And in case you are anywhere near Delhi, you'll get US to India shipping free on my next trip :).

January 23, 2008 3:55 PM
EmiratesMac Author Profile Page said:

And what about the +300 million people in the Middle East? No iTunes Store, no Apple Stores (there are stores selling Apple stuff, but not Apple's stores), no Apple Care, no Product Red stuff, price considerably higher than US, no iPhone, no Mac OS X localized in Arabic, etc.

January 23, 2008 5:17 PM
Parang Boi said:

Right on. Same goes for Singapore.


The asia HQ for Apple is located here, in this tiny island city. A small dot on the map.

However, the locals don't get access to the iTunes Music Store and the iPhone.

Although there is much to appreciate here in terms of Apple presence, there are some things which we would like to see as all of you have stated, such as a REAL OFFICIAL APPLE RETAIL STORE, not like those resellers which charge you for repairs that are already covered by AppleCare.

Oh yeah, and did you cover about Asia/Oceania being the largest continent on the face of the earth? I think that would help emphasise the outcry of asian/oceanic apple fans.

January 23, 2008 9:07 PM
iMav said:

@arya:

the cost difference is courtesy Indian govt. implied taxes namely the 12.5% VAT; this does not affect only the Mac Book Air but also Apple products and not only Apple but other companies too.

Secondly with regards to the Ambani-Apple deal; that store is still in the making at Banglaore with some members at online forums having visited the under-construction building and it is expected to open soon.

Apple not considering India/Asia or many other parts of the world as seen as a potential customer base is something very American. For some reason i believe that apple tends to stay away from these places or have less presence in such places is because they feel that an OEM product has less potential in such markets and rightly so because being from India I can say that people here think thrice and go to 10 different shops to buy something because they want Value for Money and when it comes VFM Apple products have a small chance when compared to the offers from HP/Dell/Sony and the retailers who sell these products in combo offers and huge discounts. To counter this is difficult as even if u see today Sony showrooms which could be seen at some places have vanished because people choose to buy from retailers as they offer cheaper rates and better deals in combos.

That is the reason why companies like Apple tend to stay away from direct retailing in such places

January 23, 2008 11:25 PM
RickL said:

Yeah. I'm afraid Apple may be sacrificing long-term global success and mindshare for short-term local profits. Ignoring India and China and hundreds of other nations doth not a global brand make, dost thou not think, Apple?

January 24, 2008 1:53 AM
akshay said:

you could have considered about others also .. i mean only india...!! see brazil and other countries hv same problem
iphone at 12k is cool .. but i think it will be 20k here

January 24, 2008 1:55 AM
Boris said:

Same thing here in Russia.
MacBook Air with SSD - 4.800 USD.
This is ridiculous!
Lame technical support, no iTMS.
Sad things are happening around...

January 24, 2008 2:29 AM
Elppa said:

Great article Aayush.

I live here in Brunei where there are no presence of apple whatsoever except for one tiny apple retail store ( don't know if it is official or not ). Now I'm hoping that more article regarding this issue would pop out more often. You hear that Apple!

January 24, 2008 4:03 AM
Serge said:

I'm Canadian. People here often complain about price diffrences between US and Canada, especially lately since our dollar got stronger. Your article (and comments from people living in countries like Brazil) put things in perspective. Thanks Aayush!

January 24, 2008 4:31 AM
Siddharth Agarwal said:

Good article Aayush.
I need to say I live in India and that too in Patna, Bihar the worst of all places here in India.
I stared off using macs in 2003.
Here in my state there is no apple reseller or even a service provider.
Once my mac mini developed a slight problem and I didn't know how to fix it. And of course there being no service provider I was SOL.
Thanking I was already booked on a flight to Delhi in the following week so I took along the machine and had it fixed there. The service people were kinda shocked as how could I use a mac in a place where the nearest service available was 500 km away to Calcutta. The manager of the service centre then came over and and said that he would look into having an apple reseller over in Patna. It's been three years since and of course there isn't one yet.
You would think that at least well off rich people would purchase macs but here in India nobody nor rich nor poor have even heard of macs. I remember back in October 2006 when vista was about to be released people here (my friends and their friends) were bragging about buying one. To them It was like godsend over the top latest invention machines. I just couldn't stop laughing and recommended a mac and they were like isn't that a ipod company.
My younger brother once in of one his computer class at school said to his computer teacher that he has a mac at home and the computer teacher didn't even know what mac. He thought that it was some cheap Chinese laptop that you buy for kindergartens. The one where you solve some crossword puzzles and those sort of stuff.


January 24, 2008 7:30 AM
Brajeshwar said:

Well, Apple in its quest for more and more "innovative" and "evolutionary" wow-bang-bang moments forgot to monetize on their already existing products. Everybody knows that the market size of India is humungous enough for any product entry. That is perhaps another reason why Steve Jobs is always the second-best after Bill Gates. I'm not a fan of Microsoft nor use Windows but Bill Gates is something to be reckon for when it comes to "technology + business" combo.

And yes, that price tag for the Macbook Air stalled my intention to buy one for my wife. Will have to wait for a trip to the states or friends coming from there.

Hmmm, I was just thinking if Apple (Steve Jobs) is still one of those Old Americans who feel that "America means the world". Hey guys, what do you think he will answer if he is asked the same question asked to the Miss Teen USA (South Carolina).

And Steve Jobs himself was here in Indian but damn, he was here in pilgrimage and must be thinking Indians are still cows and all those the American see in Discovery Channel.

January 24, 2008 10:16 AM
Aayush Arya said:

LOL! Why would he think we are cows? :)

January 24, 2008 10:29 AM
Brajeshwar Author Profile Page said:

Oops! I was trying to mean "India means cows" and not "Indians".

But yes, most typical American household thinks of India like what they see in Discovery Channel.

Btw, Diggers seem to like the story too

http://digg.com/apple/Indians_can_buy_a_car_for_the_price_of_a_Macbook_Air

January 24, 2008 11:27 AM
SaudiMac Author Profile Page said:

I agree with EmiratesMac, Apple can increase it's presence here if they actually handled the local market directly (instead of relying on IMC).

No plans for a middle east iTunes store will only help piracy, and lack of real support and service only helps the competitors

January 25, 2008 9:27 AM

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