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Thursday, Jul 18, 2013 1:54am
IDC report on poor Apple iPhone sales in India challenged
A report for a stock analysis site who is based in India is challenging the findings of market researcher IDC on Apple's success -- or lack thereof -- in India. The data, reported in the Economic Times, claims the company sold only 120,000 iPhones between January and March 2013 -- however IDC's own estimate of Apple's marketshare in the country suggests that in fact it sold nearly double that number, around 210,000 iPhones (using total handset sales figures from Strategy Analytics). A report from Credit Suisse in May said Apple was selling nearly 400,000 iPhones per month during the same period.

Though impossible to verify until Apple releases sales figures for the iPhone -- and if they reveal specific sales from India -- Seeking Alpha's Jay Somaney says IDC's figures are "impossible" based on store visits and chats with resellers. Managers at Reliance Digital, the country's largest Apple reseller, say that the same moves Credit Suisse said had turned sales around in India -- a marketing blitz, promotional offers, trade-ins and instalment plan options -- has led to the company "selling significantly more" iPhones compared to what it sold in the previous four years.

Further undermining the IDC conclusions is the fact that Apple is expanding the number of Apple-exclusive retail resellers to over 200, up from the previous figure of 70. Apple opted to change away from having carriers sell the iPhone -- where staff could easily be bribed to push Android models instead -- to signing up exclusive and non-exclusive retail resellers. A possible route to the flaw in IDC's numbers may be that it only contacted the original 70 dealers, thus not discovering the sales information from however many additional outlets have been officially added since then.

As Somaney points out, "Apple wouldn't be expanding [resellers] that rapidly to sell a mere 14 to 15 iPhones per day per reseller, would they?"

Strategy Analytics believes that around 10 million smartphones of all types were sold in India in the first quarter of the year, making the country the third-largest market in the world. IDC says that Apple's share of that market fell from 4.7 percent to 2.1 percent during that time, but even if that were true it would still suggest that Apple sold just less than double the number of iPhones IDC claims.

Somaney says that the general impression he got from visiting resellers first-hand over the last few weeks -- during the second quarter of the year -- suggests that Apple's sales are rising rapidly and in some places account for 10 to 15 percent of all the smartphones sold this year.

The distributor for most Apple products in India, Redington, reported at the end of last year that Apple had sold more than 400,000 iPhones during the second half of 2012, prior to the big marketing push and promotional campaign. The report from Credit Suisse and even Somaney suggests that at the very least, Apple has maintained that level of sales.

While IDC's data says iPhone sales in the country are falling, the latest findings contradict even IDC's own previous report from earlier this year which said that Apple's iPhone sales had tripled under the new marketing plan. Because India's handset market is still dominated by "feature phone" devices, the smartphone market is much smaller and more volatile. Samsung is the largest player by far in India's phone arena, since it sells both smart- and non-smart phones.

At least one of the groups reporting on iPhone sales in India is wrong about the situation there, barring some logical explanation of the large discrepancy. Hopefully, Apple's regional sales figures -- which will be discussed on July 23 during a conference call with analysts -- will shine a light on the reality of the important and growing Indian market.