The Indian smartphone market has many similarities to China six years ago but is more price sensitive, according to analysts at Morgan Stanley.
The average price of an Apple iPhone in India is $612, much higher than Samsung's average selling price of $173 and Micromax's $86, according to Ramon Llamas, research manager at IDC. Llamas also pointing out that last year, 86.5% of all smartphones shipped into India retailed under $200.
"Apple's price point is relatively high for the Indian market when you have viable competitors that are in some cases offering better functionality," said Deven Parekh, managing director at venture capital firm Insight Partners.
One of India's top celebrity bloggers echoed that same sentiment.
"The iPhone still wins easily on prestige appeal, but it's hard to ignore the wide range of premium Android phones available in the market, at a fraction of the cost," said Malini Agarwal a.k.a. MissMalini.
"You can buy 3 full featured laptops for the price of one iPhone 6s Plus. Even a brand new, premium Honda or Vespa scooter is cheaper. That's a tough sell," said Agarwal.
Apple requested to sell refurbished, cheaper phones in India, a request the government there rejected Thursday. (Apple told CNBC the company has yet to see the government's decision.) But even a cheaper iPhone may not be enough to kick-start sales there.
Mobile gurus who spoke to CNBC said consumers in India typically don't pay up for smartphones for many reasons. First, culturally there is this desire to switch or trade phones on a regular basis given the wear and tear associated with the humidity and pollution in India. Second, there is limited availability of LTE and/or 4G in the country, therefore less of a need for a premium smartphone.
However Morgan Stanley's Global Technology Team sees this changing.
"While the high- end smartphone market in India is small – only 6M units at US$300+ or 6% of the total – compelling macro and demographic trends, coupled with increasing 4G and ecommerce adoption, mean users are likely to upgrade to better smartphones over time," wrote Katy Huberty Managing Director at Morgan Stanley on April 20th.