India has long been one of Samsung's most prized markets. The company has jealously guarded its lead in the market from Chinese rivals. It suffered a terrible onslaught in the low-end and mid-range segments from both local and Chinese OEMs for over a decade, but Samsung was able to maneuver out of the storm by focusing on enhancing its product lineups, offering features suitable for local users, relying on its vast retail presence, and banking on its brand equity to continuously win over customers.
That threat still exists, but it's nowhere near as drastic as it once was. On the other hand, Samsung's primary rival in the premium segment has largely been Apple, which has increased its focus on India over the past few years. The Cupertino company is banking on the higher demand for premium devices and the relative shine on its brand to make more money on Samsung.
Apple doesn't sell nearly as many units as Samsung does in India but it's making a lot more money, so who'd you say wins this battle? The recent data from market firm from IDC shows that Apple shipped 4.8 million iPhone units in India for the first half of 2024 and made $4.56 billion in revenue. Meanwhile, Samsung shipped almost double the units at 9.8 million, yet its revenues were $3.43 billion only, $1.13 billion less than Apple.
The gap between the two has increased considerably compared to the previous year. Apple earned $8.69 billion from iPhone shipments in India last year while Samsung earned $8.33 billion, $362 million less than its main rival, making it the first time that Samsung lost its value share lead to Apple in the country. That gap has now swelled to $1.13 billion for the first six months of 2024, helped by record-high average selling prices for iPhones and Apple's aggressive market expansion.
Samsung's average selling price has suffered a significant fall from $380 in Q1 2024 to $313 in Q2, 2024. The company's devices underperformed in the $700+ segment as Galaxy S24 shipments were unable to sustain the momentum of the previous quarter. Apple's average selling price is said to be over three times that of Samsung. In Q2 2024, Apple dominated the $600-800 and $800+ price segments, with 61% and 83% share of shipments in these price bands, with Samsung only managing 21% and 16% respectively.
This represents a very worrying trend that despite routinely earning more than $1 billion with sales of just its Galaxy A series alone in India, the company is unable to make a dent in the premium segment, even with its robust Galaxy S series and its foldable devices. The vast majority of customers looking to spend that much money are opting to go with an iPhone instead.
Here's another worrying trend: While Samsung's revenue has increased 53.6% in the last five years its volumes have reduced 20% while Apple's iPhone revenue has increased by more than 7x, and its volumes grew 6x. Market analysts expect Apple to keep up with its stellar financial performance in the Indian market, meeting the growing need for premium devices in India through its aggressive marketing campaigns and local manufacturing.
One could ask the question, what good is it to ship nearly double the number of smartphones in the country while your rival gets away with shipping half and still makes an extra billion dollars in revenue? When does it begin to sound alarm bells at the company that forces a course correction? Because the way things stand right now, Samsung's losing to Apple in India in the only thing that matters: Money.
It's not enough to say that Apple only focuses on the premium segment and is conveniently not competing against the hordes of rivals in the low-end and mid-range segments like Samsung. The significant gap between the two in the premium segment highlights very clearly that Samsung's premium devices aren't able to entice customers spending the big bucks enough to turn the tide in the company's favor.
Are the marketing campaigns not focused enough? Are these devices at a pricing disadvantage compared to iPhones? Is there a reputation issue that needs to be addressed? The Galaxy S flagships and the foldables are very fine devices, some of the best on the market, and foldables are entirely unique because Apple doesn't make them, and yet Samsung is far behind Apple in the most lucrative price band.
I imagine that these questions must be asked of Samsung India by the powers that be at Samsung HQ, because surely there's enough potential in its high-end lineup to not confine the company to a future of potentially becoming a bottom-feeder in the Indian smartphone market.
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