Apple Inc. launched its first Apple store in India on Tuesday as a strategic move to increase its revenue and iPhone sales on the burgeoning Indian market. The Apple BKC store is located in Mumbai, the largest metropolis in India. On Thursday, a second Apple store will open in the national capital of Delhi.
Tim Cook, the chief executive officer of Apple, stated in a press release on Monday that India has a “beautiful culture and incredible energy,” and that the company is eager to build on its longstanding heritage in the country. Cook added that India has been a crucial market for Apple’s future development, and the company is devoting a great deal of effort to expanding its presence there.
The new store in Mumbai, which claims to be one of the most energy-efficient retail locations in the world, operates solely on renewable energy with no reliance on fossil fuels. According to analysts, Apple’s current strategy parallels its initial entry into the Chinese market, which is now one of the company’s largest markets.
However, India’s smartphone market has been dominated by Samsung and Chinese brands such as Xiaomi, whose low- to mid-tier priced devices have won over price-conscious consumers. Apple’s market share in India has been small, but the country’s “premiumization of the market” may present an opportunity for the iPhone manufacturer.
Neil Shah, a partner at Counterpoint Research, reported that smartphones priced above $400 now account for 10% of all handsets shipped in India, up from 4% before the pandemic. This category of smartphones generates 35% of the market’s total revenue. “Apple, as usual, has the right timing for ‘peaking at the right time’ with its flagship store strategy to propel this trend in its favour,” Shah wrote in an email to CNBC.
With a growing middle class and a youthful, “mobile-first” population willing to pay more for phones, particularly in India’s wealthiest cities such as Mumbai and Delhi, Apple’s India drive offers the opportunity to increase revenue and iPhone sales to levels seen in markets such as the United States and China.
According to Counterpoint Research, Apple will dispatch approximately 6.5 million iPhones in India in 2022, compared to approximately 50 million in the United States and China annually. Shah stated that India has the potential to attain this level in the future years.
Wedbush Securities analyst Dan Ives predicted that Apple’s aggressive expansion in India could increase annual revenue to $20 billion by 2025. It’s not just about selling iPhones, though. Apple’s strategy has been to bind consumers into its suite of products, including the Apple Watch and Apple Music services.
Apple has begun assembling its flagship iPhone 14 in India as part of its India strategy. According to India’s minister of commerce and industry, Piyush Goyal, the company plans to manufacture 25% of its iPhones in India. By relocating production from China to India, Apple intends to diversify its product assembly away from China and reduce the supply chain vulnerability exposed by the Covid-19 pandemic.
