With sales climbing fast, India is one of the hottest smartphone markets in the world right now. Apple (NASDAQ:AAPL) naturally wanted to lead this market, at least be a major player. However, data suggests that ambition seems to be slipping. The company has to dethrone Samsung, which has been a market leader for many years now. Plus, there are many local players, of course. To make matters worse, Chinese handsets are fast becoming popular in the country.

Apple is Not in the Top 5 in India

The results of 2016 fourth-quarter have just been released. It shows the smartphone market has grown by 4 percent between October and December. 28.1 million smartphones were shipped. Samsung (KRX:005930) is still the leader with 22 percent market share in spite of the explosion concerns in the United States. Chinese smartphone brands occupy the other four positions in the top five.

OPPO, the Chinese smartphone maker has made remarkable progress. They have shipped 2.6 million smartphones in 2016, as compared to the 200,000 handsets in the same period of 2015. OPPO has been marketing aggressively in India, sponsoring cricket games, television shows, and hiring Bollywood celebrities as brand ambassadors.

So Apple does not find itself in the top five in India at this time. There is little hope for them to make a breakthrough in 2017 as well. Local players like Lava, Intex and Micromax were in the top five in 2015. They have lost out to the Chinese brands too, largely because of the demonetization plan launched by the Indian government in early November where all 100 and 500 Rupee notes were withdrawn.

Other brands that were pushed out from the top five in the last quarter of 2016 were Lenovo and Xiaomi.

Demonetization Worked Against the Local Smartphone Brands

An analyst with research firm Canalys says it was only natural that the local brands suffered the most because of this. He says, “Local brands’ target customers typically buy in cash and from independent retailers. With the short-term liquidity crunch caused by demonetization, these retailers are suffering a slowdown in consumer spending”.

There is buying crunch in the country now after the demonetization. As a result, retailers are stocking only the goods that are fast-moving.

The demonetization is expected to impact India’s economy over the next few months. This is bad news for Apple (NASDAQ:AAPL) in 2017 as well, as the country is extremely price sensitive. The high price of iPhone is an obstacle for the business in India.