2023-04-18 17:26:07
Apple launched its online store in India in 2020 but still hadn’t opened a store due to investment rules. FRANCIS MASCARENHAS / REUTERS
A new step for the American group which hopes to find a growth driver in South Asia.
New Delhi (Inde)
There were hundreds of them queuing on Tuesday morning in front of the country’s first Apple Store. A long line stretched in front of the building with cathedral windows, in the BKC district of Bombay. The CEO, Tim Cook, had come in person to meet the first customers and mark a new stage in the history of his company. This first store will be followed by a second, which will open its doors on Thursday in the district of Saket, in the south of New Delhi.
The reasons for Apple’s appetite for India have not changed since Tim Cook first visited India as CEO in May 2016: finding a source of growth to stem the decline in iPhone sales worldwide. The turnover of the Cupertino brand in India jumped by almost 50% in the fiscal year 2022-2023 (which runs from April to March) to reach 6 billion dollars. Meanwhile, its global revenue was down 5% year-on-year in the final quarter of 2022.
At first glance, India does not appear to be the easiest market to conquer for Apple and its overpriced equipment. Its products have been available there via the brand’s website since 2020 and the consumer tends to be sensitive to the price. In volume, Apple is content with a 4% market share, far behind Samsung, Xiaomi and Vivo, which together captured 55% of the market last year, according to Counterpoint Research. But in value, the Californian firm holds 18%, just behind the leader Samsung. Thanks to the iPhone 13, Apple is number one in the segment of premium smartphones sold for more than 30,000 rupees (about 350 euros). As a result, the American group is taking full advantage of the new trend in India, where sales of low-end phones are running out of steam. “The premium market share has increased in 2022 to reach 11%, unheard of”, observes Counterpoint Research in a note published at the end of January. Apple ramped up aggressive promotions and credit offers during the Hindu holiday of Diwali six months ago, making the iPhone 13 and 14 a little cheaper.
The iPhone 14 assembled in India
The opening of stores in Bombay and New Delhi is the last step in a tortuous journey. Apple has been looking for Apple Stores in the country for more than seven years, while in China, its first store opened in 2008. The company first wanted to import second-hand iPhones to India, refurbish them and then resell them at affordable prices. Categorical refusal of the Indian government which feared to see the country crumbling under the electronic waste. Above all, New Delhi wanted to promote the emergence of a smartphone assembly industry to create jobs and boost exports. Apple therefore persuaded its Taiwanese partners, with whom it already works in China, to manufacture its phones in India.
Wistron began assembling older iPhone models in Bangalore in 2017, followed by Foxconn expanding its site near Chennai two years later. In 2022-2023, India exported some $10 billion worth of smartphones, about half of which were iPhones. And last September, Apple announced that the latest iPhone 14 would be assembled in India, a first. In exchange, the government of Narendra Modi disbursed millions of euros in subsidies. The central power notably approved in December the release of around 40 million for Foxconn.
Finally, Apple had to find local partners to produce certain parts on site. With not always happy results. In February, the Financial Times revealed that half of the iPhone cases manufactured by the Indian group Tata and destined for Foxconn were defective.
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