Apple's 3 key executives quit their jobs in India: Here is their reason

Apple's inability to grow is in stark contrast to upbeat comments of CEO Tim Cook

Apple has lost a trio of pivotal executives in India in recent weeks as it struggles to boost iPhone sales in the world’s fastest-growing major smartphone market, people familiar with the matter say.

Among the executives who’ve departed are its national sales and distribution chief, the head of its commercial channels and mid-market business, and the head of telecom carrier sales, said the people, who asked not to be identified discussing internal matters. Apple’s India sales team is now undergoing a restructuring, one of the people said.

The executive exodus is a symptom of Apple’s persistent malaise in India, where high tariffs inflate the price tags of imported gadgets such as the iPhone and consumers gravitate toward cheaper alternatives from the likes of Xiaomi and Samsung. Instead, the company resorts to marketing iPhones that are a few generations old and doesn’t manufacture its latest models domestically, thereby incurring import levies.

Its inability to grow the business and single-digit market share stand in stark contrast to the publicly upbeat comments of Chief Executive Officer Tim Cook, who’s used phrases like “very bullish” and “very optimistic” when speaking about India.

Caught up in those challenges is Michel Coulomb, who took over as head of Indian operations in December 2017. While Coulomb has rich experience in carrier-led sales, his team has been slow to cultivate business relationships in the market, the people said. Apple also had difficulties understanding the country, leaving the sales team directionless, they said. The company’s representatives in India didn’t respond to emailed questions.

Apple’s failure to get going in India compounds its woes elsewhere in Asia — the iPhone X for instance has been a disappointment in China.

In India, where it has a market share of about 2 per cent, Apple sold just 3.2 million iPhones in 2017, according to Counterpoint Research, In the first half of 2018, fewer than a million devices moved, it estimates “iPhone India sales were weak in the first half of 2018 and, even if they show a big jump in the traditionally strong second half, Apple will still fall short of last year,” said Neil Shah, a research director with Counterpoint.

Cook has suggested India could be the next China, which is now Apple's second largest market. While the iPhone's price tag puts it out of reach for most, the CEO has predicted that young, aspiring Indians moving up the socioeconomic ladder would increasingly look to upgrade. In May this year, he said on a conference call with investors that India had set a new first-half sales record.

The world's most valuable company has stepped up its activity of late, setting up an app accelerator and a mapping development centre, while starting from mid-2017 to assemble some of its older models in the country. But it needs to do more, Shah said.

"It has not put great focus or investments into India because the market is so minuscule," said Shah. The inattention could send more users to Android phones, making it difficult for Apple to build a user base and win loyalty. "It's a Catch-22 situation for Apple in India."
@2018Bloomberg