Apple’s Indian stores highlight its ambitions in the country
Apple is preparing to open a pair of physical retail stores in India this week – another sign of the South Asian nation’s growing importance to the tech giant. CEO Tim Cook is expected to preside over the inaugural opening of Apple’s retail store in the country’s financial capital, Mumbai, on Tuesday. A second site in the Indian capital of New Delhi opens on April 20. Cook has previously spoken about Apple’s vision for India, saying he’s a “big believer” in the opportunities the country presents.
The opening of Apple’s first physical store in India is part of the company’s broader push into retail in the country, where its market share is relatively small compared to the population of the South Asian country. South. Around 620 million of India’s approximately 1.4 billion people own a smartphone, making India one of the world’s largest phone markets, as well as one of the biggest growth opportunities. , according to Counterpoint’s director of research, Tarun Pathak.
“Apple has the ability to target tens of millions of smartphones in sales each year from 6 million units currently,” Pathak told CNET. “Comparatively, Apple sells more than 50 million units a year in markets such as China and the United States.”
Hello Mumbai
Apple previewed its store location in Mumbai this week ahead of the official opening. The flagship store, known as BKC Apple, is a 22,000 square foot space in an upscale mall in the Bandra Kurla complex. The store’s design is inspired by Mumbai’s iconic kaali peeli (black and white) taxis and is among Apple’s most enduring locations, according to the company. It is spread over two levels, as well as a tree-lined ground floor that showcases Apple’s iconic products.
Apple emphasizes the Mumbai store’s focus on sustainability.
“At Apple, our customers are at the center of everything we do, and our teams are thrilled to celebrate this wonderful moment with them as we open our first retail store in India,” said Deirdre O’Brien, vice-president. Apple’s senior retail president. .
Previously, buyers in India were limited to buying Apple products from “Apple Premium Resellers” or third-party retailers, who had to acquire a license from Apple to sell devices. Customers also buy from Apple’s official online store, which opened in September 2020.
Apple says its retail employees are ready to help customers learn about Apple products, different ways to pay, and how to upgrade to iOS.
“Indian consumers are buying their iPhones from various retail outlets and online, and will likely continue to do so, but an Apple Store in two of its biggest cities in India will also give customers a chance to experience the Apple brand, and not just the products.” Kiranjeet Kaur, associate research director at IDC, told CNET in an email.
“Buying a premium phone requires more touch and feel, and consumers prefer to buy expensive phones from places they can trust,” said Neil Shah, vice president of research and from Counterpoint. “Until now, Apple had different franchises that may or may not offer the same touchscreen service, purchase and post-purchase experience.”
Made in India
The twin retail stores are opening as Apple increasingly looks beyond China as a manufacturing base to countries like India. Last year, Foxconn, a major iPhone supplier to Apple, was forced to temporarily halt operations at its main iPhone City complex in Zhengzhou, China, following an on-air lockdown. city-wide due to an outbreak of COVID-19.
Ming-Chi Kuo, longtime Apple analyst, wrote in a post on Twitter that more than 10% of global iPhone production capacity has been affected by the situation at the Zhengzhou campus. Foxconn makes about 70% of Apple’s iPhones, according to Reuters.
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The latest survey and commentary on the impact of the COVID-19 lockdown on Foxconn’s iPhone factories in Zhengzhou— 郭明錤 (Ming-Chi Kuo) (@mingchikuo) October 30, 2022
At the same time, India has handed out incentives to boost local manufacturing. According to an April report from Bloomberg, Apple has tripled iPhone production in India to $7 billion in 2022, accounting for 7% of total iPhone production. This is a jump from 1% in 2021. This growth is the result of partnerships with Taiwanese suppliers Foxconn and Pegatron.
“For consumers outside India, the benefits of a diverse supply chain are relatively opaque until there is a supply chain shock – a disruptive political, pandemic or weather event. “said Avi Greengart, analyst at Techsponential. “Even then, they won’t notice there’s a problem – and that’s the point. Instead of facing shipping delays, limited variety, higher prices, or all three, they will be able to shop as usual and get the iPhone they want.”
Apple still relies heavily on China for the majority of its iPhone production, but Taiwanese contract manufacturer Pegatron plans to increase production in India as it plans to open a second factory in the region. Foxconn, meanwhile, plans to invest about $700 million in a factory in a southern state to make phone components and possibly iPhones. Analysts say Apple may start manufacturing the next-generation iPhone in India.
“I wouldn’t be surprised if Apple did (manufactured the iPhone 15 in India). Apple had started manufacturing iPhone 14 models (except the Pro series) in India shortly after launch and was exporting these models to markets such as the US, Europe and the Middle East,” Kaur said. “India currently accounts for a very small share of iPhone manufacturing (<5%) but we expect this to increase not only to account for local consumption but also exports.”
Apple already manufactures the iPhone 14 in India, which is assembled at a Foxconn factory on the outskirts of the southern city of Chennai. The tech giant has been manufacturing iPhones in India since 2017, but they are usually older models.
Invitation from Apple for the opening of its retail store in Mumbai.
Despite all the promises that India holds, it is not without difficulties. The South Asian country is not known for its ease of doing business, with a well-documented penchant for bureaucracy and sudden regulatory changes. Apple might also have to pay steep import duties for components, among other supplies it needs.
Nevertheless, India’s appeal is strong. Indian Apple stores were rumored to open as early as 2016 before finally becoming a reality on Tuesday after a series of delays. This comes about twenty years after Apple moved into Asia, with a flagship store in Tokyo in 2003.
“The 620 million smartphone users in India buy their third or fourth smartphone,” Shah said. “As a result, given the growing reliance on smartphones for everything, people are opting for better and more expensive phones.”
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