More than 20 years after Apple products launched in Indian markets, the tech giant is finally set to open its first stores in the country.
The two stores – in the capital Delhi and India’s financial hub Mumbai – will be inaugurated later this month. Bloomberg has reported that Apple CEO Tim Cook is likely to visit India next week for the occasion.
The Mumbai store’s unique, colorful design – inspired by the black and yellow taxis zipping through the city – and the hype around the launch have sparked enthusiasm among many Indians. The iPhone continues to be an emerging product in the price-sensitive Indian market – more than 95% of smartphones run on Google’s Android platform.
Until now, Indians have been able to buy Apple products in the country either online or through a vast network of so-called “premium retailers”. As such, there has been some speculation as to whether the ability to sell products directly to customers in India — the world’s second largest smartphone market — will affect fortunes here.
It also comes at a time when India is rapidly rising as a manufacturing base for the iPhone.
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However, some experts say that while the new stores will be important branding tools, they would have little impact on Apple’s market share in India.
“The whole idea of opening an Apple Store is to showcase the range of products that are available in the Apple ecosystem. But most of these products are too expensive for a country like India, where much of the market is non-premium,” says Prasanto K Roy, who has done extensive research on technology and public policy issues.
Apple has long tried to open physical retail stores in India – its original 2021 plans derailed because of the Covid-19 pandemic.
For years, the company had urged the Indian government to relax rules that required foreign-owned single-brand retailers to source 30% of the value of products sold in India from domestic suppliers. Apple had argued that the number was unrealistic — at least in the short term — since it makes virtually all of its devices in China.
In 2019, the Indian government eased some investment regulations, exempting companies selling “cutting-edge” items like Apple’s iPhones and iPads from the requirement. The next year, when announcing Apple’s plans to open a physical store in India, Mr Cook had said the company had been waiting for Indian government approval “to get in there itself” rather than with a domestic partner. “I don’t want anyone else running the brand for us,” he told shareholders.
The next year, Apple launched an online store in India. The site, which allows users to inquire about customized products, has met with a “great response,” according to the company.
Mr Roy says Apple’s decision to open physical stores in India could be the next step in its branding strategy. “It’s not like this will impact Apple sales in a dramatic way,” he adds, “but it’s still an important milestone that will allow Apple to offer Indian customers the full Apple experience.” .”
Spacious, carefully curated and full of artful displays and clever designs, these stores are projected as the physical embodiment of the Apple brand itself. “The excitement of visiting these shops is an experience in itself,” says Mr. Roy.
He adds that the opening of an Apple Store in India is also a statement that in more ways than one, the country “is now big enough that Apple is actually interested in expanding its operations here.”
Apple first began manufacturing a low-end model of the iPhone in India in 2017, in the southern state of Tamil Nadu. Last year, the company started producing its latest iPhone 14 model in the country, which now accounts for 5% of the total iPhone production.
For years, Apple had relied on China’s sophisticated manufacturing network to manufacture the majority of its products. However, its reliance on the country became strained after Beijing announced its “zero Covid” policy, prompting months of industrial lockouts and massive supply chain disruptions.
“India’s holy grail would be to get a big iconic brand like Apple to move from China to India. And Apple has done that,” says Mr. Roy.
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Analysts predict that by 2025, a quarter of all the company’s iPhones could be produced in India. In January, German Trade Minister Piyush Goyal also said that Apple already makes between 5% and 7% of its products in India and that “they aim to increase up to 25% of their production.”
Navkendar Singh, a technology analyst at research firm International Data Corporation (IDC), says the launch timing also bodes well for the company as the premium market grows in India.
According to IDC data, in 2022 Apple had a 60% market share of the Indian “premium smartphone” market – which refers to mobile phones costing Rs 40,000 (£451; $558) or more – in India, before Samsung’s share of 21%.
“Apple performs well in all categories. When you open an Apple Store, you are essentially offering a premium experience to your premium customers. It may not be driving sales, but it’s definitely attracting more people to the Apple ecosystem.”
Also, adds Mr. Singh, Apple can absorb losses even if the store doesn’t start making money in the first year.
“The real challenge will be getting consumers out of the retail stores and into these flagship centers without alienating the partner sellers,” he says.
“Otherwise it’s a good story. They finally understood that India’s premium market is growing, so why not take it seriously.”
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