India is one of the world’s largest smartphone markets with huge potential. Apple CEO Tim Cook sees strong growth opportunities in the country. But a fight between the iPhone maker and India’s telecom regulator could lead to iPhone sales ban in the country. Interestingly, the iPhone sales are already declining in India despite Apple’s efforts to boost sales.
Why are Apple and TRAI fighting?
The fight between Apple and the Telecom Regulatory Authority of India (TRAI) has been going on for quite some time over fraudulent calls and messages. What’s the matter? And why is TRAI threatening to ban iPhone sales in the country? Let me explain.
To protect consumers from spam and fraudulent calls and texts, TRAI has developed an app called Do Not Disturb (its latest iteration is called DND 2.0). The app has been available on Google’s Play Store for almost two years. Android users can install the app to report spam calls and texts directly to authorities. Sounds cool? Yeah, but the app has pathetic ratings on the Google Play Store.
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Apple has refused to approve the DND 2.0 for the iOS App Store. The tech giant argues that TRAI’s app poses privacy risks as it seeks access to calls and messages of a user. According to the App Store rules, third-party apps cannot access call logs and texts, though they can see saved contacts.
The iPhone maker has said previously that it was working with the government to develop a version of the app that serves the same function while adhering to the App Store rules. But the company has shown little progress on the app.
Apple is pretty serious about user privacy. In the past, the tech giant refused to unlock the iPhone SE of the San Bernardino shooter. Anyway, the FBI managed to unlock that device using services of an Israeli security firm.
TRAI isn’t directly going to ban iPhone sales but…
TRAI has introduced a new policy called Telecom Commercial Communication Customer Preference Regulation, 2018 that threatens to ban iPhone sales in the country if Apple doesn’t allow the DND 2.0 app to the App Store.
The new regulation mandates that all smartphone users in the country should be able to install the DND 2.0 app on their devices. The law is supposed to be followed by wireless carriers, not by smartphone vendors who fall outside the purview of TRAI. If Apple doesn’t approve the app, TRAI could ask telecom carriers such as Vodafone, Reliance Jio, and Airtel to “delist and deregister” all iPhones from their networks.
The regulator has given carriers six months to ensure the availability of the app on all devices.
Every Access Provider shall ensure, within six months’ time, that all smart phone devices registered on its network support the permissions required for the functioning of such Apps as prescribed in the regulations 6(2)(e) and regulations 23(2)(d),” says TRAI. “Provided that where such devices do not permit functioning of such Apps as prescribed in regulations 6(2)(e) and regulations 23(2)(d), Access Providers shall, on the order or direction of the Authority, derecognize such devices from their telecom networks.
The regulator isn’t going to directly ban iPhone sales in the country. But if Apple doesn’t permit TRAI’s app in the App Store, all the iPhones in the country will lose access to voice and data services. As a result, customers may stop buying new iPhones altogether.
Apple, TRAI could find a middle ground
In real life, things are unlikely to be as scary as they seem. Both Apple and TRAI are on the same page that users should be protected from fraudulent calls and messages. So, the two could work to find a middle ground without violating user privacy. Apple will not want to lose access to a market with enormous growth potential. The company has started producing the iPhone SE and iPhone 6S locally in India to avoid import duties and make its products more affordable to consumers.
Apple could develop an in-house app for the Indian market that serves the same purpose as TRAI’s DND 2.0. What’s more, the upcoming iOS 12 software includes new features that use AI and machine learning to recognize and block spam texts. The tech giant could demonstrate to TRAI that its software does the same thing as DND 2.0, eliminating the need to have the third-party app in the App Store.
Apple is struggling to sell iPhones in India, even though it is promoting the older (and cheaper) models to generate more sales. According to Bloomberg, it sold 3.2 million iPhones in the country in 2017. But the numbers plunged to less than one million units in the first half of 2018. Apple’s market share has been in the 2-3% range in the country for more than five years.
Amid falling sales, three senior executives recently quit Apple’s India operations. Sources told Bloomberg that the iPhone maker was restructuring its India team. Apple is facing tough competition from Samsung, Xiaomi, OnePlus, Oppo, Vivo, and Huawei in the Indian market.