AAPL and no America

In the AAPL announcement they indicated that growth was slower in China than they had thought but that India was a bright spot.

Some have dismissed this. I believe that this is a grave mistake.

If you read the Geopolitical Newsletters put out by George Freidman you will understand just how tough the Chinese have it. George has not put one out on India, or at least I have not read it. However, from my own research, India has a couple of things going for it that China does not.

  1. Demographics - India has a population that rivals China,but when you look down into the no,bees you see that India’s population is young and the population pryamid is normally shaped, unlike China’s.

  2. Language - India already has a language that intergrates it into the western world, China does not.

You say so? India is poor and cannot afford IPhones. Well there are two things impacting that.

  1. India is big. Like 3 times the population of the U.S. You only need 10 percent of the population there to be in the target income range and you have a target population the size of the top 1/3 of the U.S.

  2. Order of importance. We geezers seem to think that what we thought was important in 1969 is still important to young people, it isn’t and less so to Indian young people. I have anecdotal evdidence from Africa and the U.S. that priorities go some thing like this: Food, Internet.

Where we needed a car to be independent, young people today need Internet, specifically mobile internet. Where we needed a Mustang, or Camero to be cool, they need an IPhone 6.

Where we needed to get girl in the car in nice quiet dark place, all they need is a room and snap chat.

Finally, back to AAPL. This is a company in a place that currency has mojo. They are not looking back, they are looking forward and believe they can win.

Think about it. The order of priorities for young people world wide is Food, Internet, preferably mobile internet.



Where we needed to get girl in the car in nice quiet dark place, all they need is a room and snap chat.

The thing is, one leads to the continuation of the species and the other doesn’t.

Hope they figure it out.


Jim ← tongue firmly in cheek


Here’s my take on Apple making a bolder move into the Indian smartphone market.

First, a macro perspective in a recent 12/3/2015 IDC press release. According to a new forecast from the International Data Corporation (IDC ) Worldwide Quarterly Mobile Phone Tracker , 2015 will be the first full year of single-digit worldwide smartphone growth. IDC predicts worldwide smartphone shipments will grow 9.8% in 2015 to a total of 1.43 billion units. IDC updated its previous forecast to reflect slowing growth in Asia/Pacific (excluding Japan), Latin America, and Western Europe. The slower growth is expected to intensify slightly over the 2015-2019 forecast period and is largely attributed to lower shipment forecasts for Windows Phone as well as “alternative platforms” (phones running operating systems other than Android, iOS, and Windows Phone).


According to the IDC Asia/Pacific Quarterly Mobile Phone Tracker, 26.5 million smartphones were shipped to India in the second quarter of 2015 (2Q15), up 44% from 18.4 million units for the same period last year. This strong second quarter performance saw smartphone shipments grow by 19% following a sluggish first quarter this 2015.

In the latest third quarter of 2015, according to a IDC, 28.3 million smartphones were shipped to India in the third quarter of 2015 – up 21.4% from 23.3 million units for the same period last year.
IDC also reported the following:

o One out of 3 smartphones shipped in India in Q3 2015 are 4G enabled as the country prepares for next-generation mobile technology.

o The growth in the smartphone market was helped by rising demand for affordable 4G smartphones (source: Client Devices)

o In the third quarter, 4G-enabled devices witnessed almost a three-fold increase in unit shipments over the previous quarter. Samsung emerged as the biggest 4G player in India with its popular sub-$150 LTE models, such as Galaxy Grand Prime and Galaxy J2.

o Growth was driven by phones with larger screens at low cost. According to Client Devices, almost one out of every two smartphones sold, had 5-inch plus displays. Most of the popular models in the market today support 4G, have a large screen, and are attractively priced at less than $200.

An IDC pie chart shows Smartphone Vendor Market Share in India for Q3 2015 with the following percentages:

24.0%: Samsung (Korea)
16.7%: Micromax (India)
10.8%: Intex (India)
9.5%: Lenovo (People’s Republic of China)
4.7%: Lava (India)
34.2%: Others

Note above that 3 Indian companies are in the top 5. Where is Apple? Apple ranked 18th with a meager 0.9%.


In September 2015 meeting with Apple CEO Tim Cook, the Indian Prime Minister Narendra Modi wanted Apple to do what Lenovo, a China-based OEM, did, i.e., established a manufacturing base in India that reduced costs for production, logistics and distribution that, in turn, met India’s market demand for less expensive mobile devices. Apple’s dilemma is that what the Indian Prime Minister wants runs counter to one of Apple’s long held strategy for its entire device portfolio - secure and maintain high profit margins.

Samsung is in the Indian mobile device market big time. Unlike Apple, Samsung offers many more device variants within a wide price range. There exists today a huge price gap between a $750 iPhone 6s Plus and the aforementioned (a) popular sub-$150 LTE models, such as Galaxy Grand Prime and Galaxy J2 that made Samsung the biggest 4G player in India and (b) the most popular models in the market today that support 4G, have a large screen, and are attractively priced at less than $200.





There’s no dilemma for Apple as they don’t want to be in a race to the bottom, there’s no profit in it.

They’re content with keeping the high end of the market supplied with high quality, highly profitable devices. There are a LOT of people in India who can afford and will buy the best device available. As a shareholder, I’m happy with that, too. If they started going after the low end market, it would cheapen the whole company, I’d be out.

Apple’s doing just fine (the company), and will continue to be fine (company and stock) for many years to come.