Will Apple Lose the Indian Market to Cheaper Alternatives?

Is Apple (NASDAQ:AAPL) losing out in emerging markets for lack of a cheaper iPhone? Both Apple and Samsung (SSNLF.PK) are being outsold in the Indian smartphone market by several local competitors reports Bloomberg. According to IDC statistics via Bloomberg, India will become the “third-largest smartphone market by 2017.”

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However, since most of India’s population lives on less than $2 a day, premium Apple and Samsung products are at a distinct price disadvantage. According to Bloomberg, Apple’s cheapest smartphone, the iPhone 4, sells for about $486 in India. Likewise, Samsung’s Galaxy Y Duos Lite sells for about $112. Neither smartphone is seen as a viable option by most Indian consumers.

Although Samsung still ships the most units in India overall, several local handset makers are making rapid gains according to Bloomberg. Second-ranked Micromax and fifth-ranked Karbonn are quickly gaining more market share according to IDC via Bloomberg. Micromax phones start at about $74 and Karbonn phones start at about $66…

Besides having the advantage of cheaper phone prices, Micromax and Karbonn are also following the local convention of subsidizing monthly data plans. Most other markets focus on subsidizing the cost of the device. According to Gartner statistics via Bloomberg, nearly 75 percent of the mobile phones used by Indians cost less than about $46.

Both Micromax and Karbonn use Google’s (NASDAQ:GOOG) Android platform. Based on IDC statistics, Apple is currently ranked sixth in India with 254,000 iPhones shipped.

Apple shares are down $4.08, or 0.94 percent, at $430.25 in early Friday morning trading.

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AAPL midmorning friday

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