Apple facing uphill battle in India from Samsung mindshare, factory expansion

According to a new report from the Wall Street Journal, Apple is making little headway in India for more than just cost reasons. Fighting to even maintain its 3 percent market share, Apple will face new competition from Samsung clutching 27 percent of the marketplace, and expansion in the form of a new $760 million facility in the outskirts of India's capital city.

The report cites recent analytics seeing local Indian vendors market shares plummeting in the last year, at the expense of Oppo, Vivo, and BBK Electronics offerings in the country. Samsung is impacted as well, but still commands nine times the market presence that Apple does.

But, it's not clear how much profit the other manufacturers make in the country. Analysts estimate that more than 75 percent of the phones in the country sell for less than $250, with 95 percent selling for less than $500. The overall average of all smartphones sold is estimated to be right around $150.

According to the new report, Apple is considering flagship stores in New Delhi, Bangalore, and Mumbia — all three locations where most of India consumers wealth is centered. This is in addition to the Apple Authorized Reseller expansion that Apple was said to be examining in March.

Trade partners are reportedly already setting up the Apple Authorized Reseller locations, with the first batch including places in New Delhi and areas of the National Capital Region, such as Vasan Vihar and Malviya Nagar. Other cities including Mumbai, Bengaluru, Pune, and Chandigarh will also see reseller openings in the future.

In early March, the iPhone 6 went on sale exclusively through Amazon for $435, with the revived smartphone offered with an unusual 32 gigabytes of storage, similar to sales in a few other markets. The iPhone SE has been seen for sale in India new for as little as $320.

Apple has also floated the idea of selling refurbished iPhones in India, providing more modern generations of the mobile device to the population at a low cost, to try and combat the high sales of cheap Android smartphones by Samsung, and others. So far, the government has pushed back on this idea, fearing that this could flood the market with cheap and used goods, and undermining its "Make in India" program to boost local manufacturing efforts.

Apple's push for used phone sales in India was proposed as one of a number of conditions for the company to start manufacturing new iPhones in the country, along with tax breaks and other requests.

Assembly of the iPhone SE at the Karnataka Wistron facility began in mid-May, with the first units said to hit customers in a few weeks after the start of construction. Officials in the Indian government hope the new price for the iPhone SE will drop down by as much as $100 compared to the current local price, though Apple is likely to try and avoid too much of a reduction in order to preserve its margins.