Apple converts brand desirability into real emerging market sales

Puneet Sikka

Apple's iPhone keeps raking in the majority of smartphone profits (Part 3 of 5)

(Continued from Part 2)

Apple is the most desirable smartphone brand in emerging markets

According to a report from marketing firm Upstream and researcher Ovum, Apple (AAPL) is the most desirable mobile phone brand among inhabitants of emerging markets. Even though many customers in emerging markets may not be able to afford an iPhone, they still prefer it over competing devices running Google’s (GOOG) Android operating system, including handsets from Samsung (SSNLF). Consumers in Brazil, China, India, Nigeria, and Vietnam were polled by Upstream and Ovum about their smartphone of choice. According to the survey, Apple’s desirability share increased from 21% last year to 32% this year. Samsung’s desirability share declined from 32% to 29%, HTC’s slightly increased from 4% to 5%, while Nokia’s (NOK) and BlackBerry’s (BBRY) declined from 22% to 13% and 10% to 4%, respectively.

Apple’s slowly converting desirability into actual sales

Although the above chart shows that Apple’s desirability is on the rise, this doesn’t mean actual sales are on the decline due to the premium pricing of the iPhone. In the last part of this series, we discussed how Apple has started to dominate the high-end Chinese smartphone market and how 27% of smartphones sold in China sell above $500, the majority of which are iPhones.

Apple’s sticking to its policy of launching premium phones

For some time, analysts have predicted that Apple won’t be able to compete effectively in emerging markets until it launches cheaper phones. However, time and again, Apple has proven its critics wrong by sticking to its policy of not diluting its brand’s value by launching cheaper phones. Apple launched the iPhone 5C by branding it as a cheaper phone, but at $500+, it’s still expensive for emerging markets.

In the next part of this series, we’ll discuss why Android fragmentation in China is good news for Apple.

Continue to Part 4

Browse this series on Market Realist: