Apple CEO Tim Cook is currently visiting India. He personally presided over the opening ceremony of India’s first Apple Store, and plans to meet with Indian Prime Minister Narendra Modi, and will also visit customers in India. Tim Cook’s international trip is the strongest sign yet that India has become a huge strategic focus for Apple as the smartphone market becomes increasingly saturated with iPhone users.
“The energy, creativity and enthusiasm in Mumbai is unbelievable! We are excited to open Apple BKC – our first store in India,” Tim Cook said on Twitter.
The next Chinese market
For Apple, India could play a similar role to China’s in Apple’s business over the past 15 years: a huge market, a growing middle class fueling sales growth, and the potential for millions of Apple devices production base.
Analysts point to India’s large population and maturing economy as ideal conditions for Apple to enter the market by stepping up its marketing efforts and offering a retail presence in the country. Meanwhile, the Indian government is eager to work closely with Apple to make its production in India possible.
Angelo Zino, senior analyst at investment research firm CFRA Research, believes Apple has room to grow in the Indian subcontinent. Apple’s share of the smartphone market in India is less than 5%, compared with about 18% in China. Most of the mobile phones sold in China and India use the Google Android system.
“If you look at India today, it’s a lot like China was 15 or 20 years ago,” Zino said. “Over time, this natural wealth effect will help Apple really break into the Indian market and see revenue growth.” Significant growth potential.”
The opportunity could be huge: Apple’s sales in China, Hong Kong and Taiwan will reach $74 billion in fiscal 2022, accounting for about 18% of Apple’s total revenue for the same period. India isn’t there yet, and it’s merged with the rest of the market into Apple’s “Rest of Asia-Pacific,” with sales of just $29 billion over the same period.
Indian company documents reported by local media show that Apple’s sales in India in the 2022 fiscal year are about US$4 billion, and this week it was reported that Apple achieved sales of nearly US$6 billion in the fiscal year ended in March this year. .
TimCook also compared India and China for investors. “Essentially, we’re taking what we learned years ago in China and how we scaled up in China and putting it into practice,” Tim Cook said on an earnings call earlier this year.
huge growth potential
India is by far the largest market the iPhone has yet to fully conquer. That means it’s critical to Apple’s sales growth.
In February, Tim Cook boasted that Apple had successfully attracted “converters” in India. Converters are Apple’s term for Android phone users who decide to buy their first iPhone. Tim Cook said that month that Apple’s iPhone sales in India hit an all-time high in the quarter that ended in December.
Indians who buy iPhones are more likely to be “switchers” than consumers elsewhere because Android dominates the Indian market, led by Samsung and several Chinese brands. Android has a market share of more than 95 percent in the country, according to market research firm Statcounter.
The main reason for the popularity of Android phones is the price. Most phones sold in India cost less than even the cheapest new Apple iPhones. Well-known market research firm IDC estimated in February this year that the average selling price of smartphones in India will be $224, an increase of 18% from 2022. By comparison, Apple’s entry-level phone, the iPhone SE, retails for $429 in the United States.
One way Apple is addressing this price gap is by allowing customers to pay in instalments, or by giving them a discount when they trade in an old device for a new one. When Tim Cook was asked about the Indian market in February, he mentioned these strategies. “We’ve done a lot of work on financing options and trade-ins to make products more affordable and give people more options to buy,” Tim Cook said.
Apple has launched an online store in India in 2020, and together with the opening of two brick-and-mortar stores this week, the moves are expected to boost Apple’s Indian sales.
Deep cultivation for 1000 years
TimCook will travel to New Delhi on Wednesday to meet Indian Prime Minister Narendra Modi, the people said. Modi was eager to discuss Apple’s plans for continued expansion in India and the number of new jobs the company would create. He also wants to hear from Tim Cook about the challenges he faced trying to expand the company’s products in different states.
Apple has had its eye on expanding in India since at least 2016, when Tim Cook held a meeting with Modi. At that meeting, Tim Cook briefed Modi on the potential of manufacturing and retailing Apple products in India. Now, six years later, Tim Cook has returned to India and opened Apple’s first two self-operated retail stores in India.
Apple was very optimistic about India at the time. “By 2022, India will be the most populous country in the world,” Tim Cook said at the time. “India has huge market potential.”
Apple’s long-term strategy in India can be summed up in a sentence Tim Cook told the local media during his visit in 2016.
“We’ve put a lot of effort into it here, we’re not going to be here for a quarter, or two quarters, or next quarter, or next year, we’re going to be here for a thousand years,” Tim Cook said at the time.
