Apple has opened its first store in India, signaling the importance of the market to the iPhone maker's future. The store, named Apple BKC, is located in Mumbai, and another store in Delhi is set to open on Thursday. The Cupertino-based tech giant stated it has been present in India for over 25 years.
Apple CEO Tim Cook has long viewed India as a key market to the company's future, and in February, he said he was "bullish" on the world's fifth-largest economy. Cook traveled to India for the opening of the store, nearly seven years after his first visit as Apple CEO. The company is aiming to boost sales and manufacturing of iPhones in India, resembling its strategy when it first entered China, which is now one of its biggest markets.
India's smartphone market has been dominated in recent years by Samsung and Chinese brands such as Xiaomi, with low-to-mid-tier-priced devices finding support from customers in a price-sensitive market. Apple has very little market share in India. However, India is undergoing a "premiumification of market," according to Neil Shah, partner at Counterpoint Research. Smartphones priced above $400 now account for 10% of the total volumes of handsets shipped versus 4% before the pandemic. This category of smartphones accounts for 35% of total smartphone market revenue.
The opening of the Apple store in Mumbai is an opportunity for the US technology giant to boost revenue and iPhone sales near the levels seen in markets like the US and China. Apple shipped about 6.5 million iPhones in India in 2022, compared to around 50 million each year in both the US and China, according to Counterpoint Research. Shah said India "has the potential to reach that scale" in the coming years.
Apple's India push is not just about selling iPhones. The company's strategy over the years has involved getting users locked into its suite of products, including the Apple Watch and services like Apple Music. "Apple can cross-sell other products such as Macs, Watch, AirPods, iPads and services to the growing iPhone user base maximising the revenue opportunity," Shah said.
Apple's manufacturing strategy for the future also involves India. The company began assembling its flagship iPhone 14 in India last year, the first time that the company has produced its latest device in the country so close to its initial launch. Part of the move in India is tied to the government's push to bring high-tech manufacturing to the country. But Apple is also trying to diversify its assembly of products away from China. Supply chain fragilities in the world's second-largest economy were exposed during the COVID-19 pandemic and the strict measures Beijing took to control the outbreak.
Wedbush Securities analyst Dan Ives said Apple's India strategy, with both a retail and manufacturing push, mirrors the technology giant's steps it took in the China market 10 years ago. "As Foxconn/Apple put more skin in the game on the iPhone production front within India, this will go hand in hand with a bigger retail presence within India, as seen this week, which mirrors the early days of the China penetration strategy going back a decade," Ives said.
"Rome was not built overnight, and neither will Apple's broader India strategy. However, we view this week as Apple diving into the deep end of the pool in India, as this massive market slowly converts into the Apple ecosystem over the coming years, with iPhone market share gains front and center."