On Tuesday, Apple launched its inaugural store in India, underscoring the significance of the market for the future prospects of the iPhone manufacturer. The store, known as Apple BKC, is situated in the densely populated city of Mumbai. Additionally, another store is set to open in the capital city of Delhi on Thursday.
The large tech company based in Cupertino stated that it has had a presence in India for over 25 years.
“India has such a beautiful culture and an incredible energy, and we’re excited to build on our long-standing history,” In a statement released on Monday, the CEO of Apple, Tim Cook, declared.
On Monday, Cook shared a picture of himself and the employees at the recently opened Apple store.
Apple is striving to enhance the sales and production of iPhones in India, a strategy that analysts suggest is similar to the one it used when it initially ventured into China, which is now one of the company’s largest markets.
According to Apple, their Mumbai store is among the most energy-efficient establishments globally, with a unique solar energy system in place, and no dependence on fossil fuels for its functioning. The company further stated that Apple BKC runs entirely on renewable energy sources.
For a long time, Cook has regarded India as a vital market for Apple’s future. In February, he expressed his optimism about the world’s fifth-largest economy, stating that the company is channeling a substantial amount of effort into the market. Cook traveled to India to attend the store’s opening, which marked his second visit to the country as CEO of Apple, almost seven years after his initial visit.
iPhone sales in focus
Analysts suggest that Apple’s push into India presents a lucrative opportunity for the American tech behemoth to increase its revenue and iPhone sales, much like what it has accomplished in other markets such as the U.S. and China.
As per Counterpoint Research, Apple dispatched approximately 6.5 million iPhones to India in 2022, a stark contrast to the 50 million annual shipments in both the U.S. and China. However, Shah believes that India has the potential to achieve similar numbers in the coming years.
While shipments do not equate to sales, they are a reliable indicator of the demand for iPhones in a country.
According to an individual familiar with the matter, Apple generated $6 billion in revenue in the year leading up to March, a 50% increase. Dan Ives, an analyst at Wedbush Securities, predicts that this figure may increase even further over the next two years.
In a note published on Tuesday, Ives stated that Apple is now focusing aggressively on India and has plans for both production and retail expansion, which he believes will be a strategic move for the company that could boost annual revenue to $20 billion by 2025.
However, it’s not just about selling iPhones. Apple’s long-term strategy has always involved creating a loyal user base that uses its products and services, such as the Apple Watch and Apple Music.
Manufacturing push
India is also a crucial part of Apple’s manufacturing strategy for the future. In India, Apple started assembling its flagship iPhone 14 last year, marking the first time the company has produced its latest device in the country so soon after its initial release. According to India’s Minister of Commerce and Industry, Piyush Goyal, Apple aims to manufacture 25% of all its iPhones in India.
The move to India is not only driven by the government’s efforts to bring high-tech manufacturing to the country, but also by Apple’s desire to diversify its product assembly away from China. The Covid pandemic exposed supply chain vulnerabilities in China, the world’s second-largest economy, and highlighted the strict measures Beijing took to control the outbreak.
The largest iPhone factory of Apple, which is situated in Zhengzhou, China, was affected by a Covid outbreak and worker protests last year, resulting in production disruption. The factory is managed by Foxconn, a Taiwanese company.
According to Wedbush analyst Ives, Apple’s approach to India, which includes both retail and manufacturing efforts, is similar to its strategy in the Chinese market a decade ago. As Apple and Foxconn invest more in iPhone production in India, it will go hand in hand with an expanded retail presence in the country, as seen this week. This approach is reminiscent of Apple’s early days of expansion into China.
According to Ives, Apple’s India strategy will take time to come to fruition, but he sees the company’s recent moves as a significant step towards building its presence in the country. He believes that India will gradually become a part of the Apple ecosystem over the next few years, with a focus on gaining a larger market share for the iPhone.
