Morgan Stanley: India will become Apple's next China

China's economic growth, the increase in the middle class, and the huge number of young people have created a stage for Apple to show its strength. Quartz reported that Apple's sales in Greater China increased by 84% in fiscal year 2015, breaking the historical growth record of all regions. Apple CEO Tim Cook even said that China will become Apple's "top global market." Apple's investment in China has paid off handsomely, and now a new research report from Morgan Stanley suggests that they should replicate this success in India.

India is expected to overtake the United States as the world's second-largest smartphone market after China by 2017. As their growth in mature markets slows, tech giants from Facebook to Google are scrambling to get their products in front of Indians.

India's smartphone market is very similar to China's five or six years ago

The situation in India's smartphone market is very similar to that in China five or six years ago. In 2011, China imported 92 million smartphones, and in 2015, India imported 104 million smartphones. In November 2009, a Morgan Stanley survey found that 4.6% of Chinese consumers owned an iPhone, while in January 2016, a similar survey found that 4% of Indian consumers owned a smartphone. From 2010 to 2015, Apple's market share in the $400 or above market grew from 30% to 74%. Morgan Stanley's report said: "We believe that Apple can repeat the same success in India."

Another interesting finding of the Morgan Stanley survey is that nearly half of the 2,626 Indian smartphone consumers they covered were unfamiliar with the Apple brand. Among the 12 smartphone companies, Apple's brand awareness ranked tenth, only ahead of Motorola and HTC. Morgan Stanley believes that "this means that Apple has the greatest room for growth, because our survey found that they can easily double their market share in the $400+ model market to 40%."

Of course, this is just Apple's awareness ranking among all Indian smartphone users, and overall, these Indians are highly sensitive to price. Of those consumers who are willing to pay $400 or more for a mobile phone, 41% bought an iPhone. As in China, for most Indians, Apple is a "dream" brand, and the price is beyond their affordability. The survey found that among those users who do not plan to buy Apple products, 21% said that if they have the opportunity, they would like to buy a second-hand iPhone. If users do not buy apps and other services, and do not continue to upgrade their phones, second-hand iPhones are basically unprofitable for Apple - but Morgan Stanley's report still believes that Apple should consider selling refurbished phones to the Indian market.

However, to replicate its success in China, Apple still needs to do a lot, such as opening local stores, cooperating with wireless operators, adding more local content and software, and increasing marketing efforts. Apple may have taken the first step, with recent reports indicating that they will soon get permission to open their first store in India.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.