The fiscal year of Apple Inc. (NASDAQ:AAPL) runs from October of one year to September of the next, meaning that the Cupertino electronics titan’s current fiscal year began in October 2013 and will terminate at the end of September 2014. According to information reported on Patently Apple, Apple is currently trying to push its sales in India for the current fiscal year above 1 million iPhones, and in the process has far outstripped the sales of leading competitor Samsung.
Apple and its South Korean rival are both using pricing methods to attempt to cash in on the potentially massive market available on the Indian subcontinent. With a billion people living in India and a growing economy, there is obviously high potential for sales in this region, though obviously many of these individuals are far too poor to purchase a smartphone at this point in time. Even with the majority of the population below this threshold, however, there are still tens, if not hundreds, of millions of potential customers.
Apple’s strategy has been to offer much higher margins to retailers than is standard for the California-based company. Typically, the firm sets retailer margins at 6% to 10%. However, since the start of the current fiscal year last October, Apple (AAPL) has set retailer margins in India at 13% to 15% instead. This represents a 216% increase above normal at the low end and 150% of the normal margin at the high end.
Samsung’s counter-strategy is to offer reduced prices. Apple’s tactics appear to be working, however, as it has captured more than 55% of the high end smartphone market as compared to Samsung’s 24%. Apple has not released concrete figures on the actual number of iPhones sold, nor is there any easy way to judge how close it is to achieving its goal of a million units purchased in India. In keeping with company secrecy, Tim Cook spoke in generalized terms of percentage gains rather than actual sales figures during the conference call earlier this year.
The initiative represents how Apple’s push into the BRIC countries (Brazil, Russia, India, and China) is gaining momentum despite hampering factors. Surpassing the one million mark would prove Apple’s capacity to gain major traction in these traditionally “difficult” markets and would also be a crucial step in gaining widespread recognition as a premium, desirable, and popular brand in one Asia’s larger economies.
