Apple Inc bets big on India as it opens first flagship store
NEW DELHI —
Apple Inc. opened its first flagship retailer in India in a much-anticipated launch Tuesday that highlights the corporate’s rising aspirations to broaden within the nation it additionally hopes to show into a possible manufacturing hub.
The firm’s CEO Tim Cook posed for photographs with a number of of the 100 or so Apple followers who had lined up outdoors the sprawling 20,000-square-foot retailer in India’s monetary capital, Mumbai, its design impressed by the long-lasting black-and-yellow cabs distinctive to town. A second retailer will open Thursday within the nationwide capital, New Delhi.
“India has such a beautiful culture and an incredible energy, and we’re excited to build on our long-standing history,” Cook stated in an announcement earlier.
The tech big has been working in India for greater than 25 years, promoting its merchandise by means of approved retailers and the web site it launched a number of years in the past. But regulatory hurdles and the pandemic delayed its plans to open a flagship retailer.
The new shops are a transparent sign of the corporate’s dedication to put money into India, the second-largest smartphone market on the earth the place iPhone gross sales have been ticking up steadily, stated Jayanth Kolla, analyst at Convergence Catalyst, a tech consultancy. The shops present “how much India matters to the present and the future of the company,” he added.
For the Cupertino, California-based firm, India’s sheer dimension makes the market particularly encouraging.
About 600 million of India’s 1.4 billion individuals have smartphones, “which means the market is still under-penetrated and the growth prospect is huge,” stated Neil Shah, vp of analysis at know-how market analysis agency Counterpoint Research.
Between 2020 and 2022, the Silicon Valley firm has gained some floor within the smartphone market within the nation, going from nearly 2% to capturing 6%, in line with Counterpoint information.
Still, the iPhone’s hefty price ticket places it out of attain for almost all of Indians.
Instead, iPhone gross sales within the nation have thrived among the many sliver of upper-middle-class and wealthy Indians with disposable incomes, a section of consumers that Shah says is rising. According to Counterpoint information, Apple has captured 65% of the “premium” smartphone market, the place costs vary up from 30,000 rupees ($360).
In September, Apple introduced it could begin making its iPhone 14 in India. The news was hailed as a win for Prime Minister Narendra Modi’s authorities, which has pushed for ramping up native manufacturing ever since he got here to energy in 2014.
Apple first started manufacturing from India in 2017 with its iPhone SE and has since continued to assemble quite a lot of iPhone fashions from the nation.
Most of Apple’s smartphones and tablets are assembled by contractors with factories in China, however the firm began doubtlessly transferring some manufacturing to Southeast Asia or different locations after repeated shutdowns to struggle COVID-19 disrupted its world circulate of merchandise.
“Big companies got a jolt, they realized they needed a backup strategy outside of China — they couldn’t risk another lockdown or any geopolitical rift affecting their business,” stated Kolla.
Currently, India makes near 13 million iPhones yearly, up from lower than 5 million three years in the past, in line with Counterpoint Research. This is about 6% of iPhones made globally — and solely a small slice compared to China, which nonetheless produces round 90% of them.
Last week, India’s Commerce Minister Piyush Goyal stated the federal government was in common contact with Apple to assist their business right here and that the corporate had plans to have 25% of their world manufacturing come out of India within the subsequent 5 years.
The problem for Apple, in line with Shah of Counterpoint, is that the uncooked supplies are nonetheless coming from outdoors India so the tech firm might want to both discover a native provider or carry their suppliers, primarily based in international locations like China, Japan and Taiwan, nearer to drive up manufacturing.
Still, he is optimistic this goal might be met, particularly with labour prices being decrease in India and the federal government wooing firms with enticing subsidies to spice up native manufacturing.
“For Apple, everything is about timing. They don’t enter a market with full flow until they feel confident about their prospects. They can see the opportunity here today — it’s a win-win situation,” Shah stated.
——
This story corrects the spelling of the Apple CEO’s title. It is Tim Cook, not Tim Cooke.
