He came, he saw, he conquered—that sums up Apple CEO Tim Cook’s whistlestop trip to India earlier this month when he inaugurated the company’s first Apple retail stores in the country. From welcoming visitors to its flagship outlets in Mumbai and Delhi to enjoying vada pav with actress Madhuri Dixit to discussing coding with schoolchildren or meeting Prime Minister Narendra Modi, he seemed to be all over the place.
This frenzied activity doesn’t surprise industry watchers, especially after Cook claimed, “I’m very bullish on India,” during a recent earnings call. Moreover, a day before the debut of Apple’s brick-and-mortar store in Mumbai, he proclaimed, “India has such a beautiful culture and an incredible energy, and we’re excited to build on our long-standing history—supporting our customers, investing in local communities, and working together to build a better future with innovations that serve humanity.”
Visitors who flocked to the newly opened Apple stores were seemingly dazzled by it. Delhi University’s Gauri Sinho was impressed by the knowledgeable staff and customer service. What really caught her attention was that she could browse through the wide range of products at leisure; an experience she missed out on at other Apple stores run by its channel partners.
Delhi-based Mohit Sahani echoed this opinion. “Apple recently launched its store at the Qatar airport. So, one has to go to the airport to buy aniPhone or any other gadget from the company. But this place is in a much better location,” he added.
Though Apple has an array of computing devices, smartphones, accessories and services, the iPhone emerged as the company’s brand mascot since its foray into India 26 years ago. And the product’s popularity has only increased with the passage of time.
In Outlook Business magazine’s February 2023 article, ‘iPhone for India, iPhone for the World’, the industry analysis firm Counterpoint Research shared that 2018 and 2019 were flat years for iPhones in India, with sales under two million yearly. While the following year saw decent growth, with sales of around three million units, this exploded in 2021.
In an earnings call for the September quarter of 2022, top Apple leadership, including Cook, lauded the company’s performance in India. Its CFO Luca Maestri said, “iPhone revenue grew 10% year over year to a September quarter record of $42.6 billion, despite significant foreign exchange headwinds. We set September quarter records in the vast majority of markets we track, and our performance was particularly impressive in several large emerging markets, with India setting a new all-time revenue record ... .”
Remarkably iPhone mapped a growth trajectory in India despite the country gaining a position as a price sensitive market with a large customer base for Android smartphones. The ‘iPhone for India, iPhone for the World’ article examines that while the smartphone brand is perceived as an aspirational purchase, and often an indulgence, things are moving fast for it in India, if not for Apple’s other products.
In the larger scheme of things, the company’s Indian revenue stays small in its global balance sheet—Apple shipped 237.9 million iPhones in 2021 globally in comparison 5.4 to six million units in India, according to Counterpoint. In the December quarter, the market research firm found that iPhone 13 became the highest-selling model in India for any brand, with a 4% share in total sales, beating other top models like Samsung Galaxy M13, Xiaomi Redmi A1, Samsung Galaxy A04S and Realme C35, all of which stayed at 3%.
This rising popularity could be a result of Apple concentrating on sprucing up its operations in India, building better relationships with vendors and concentrating on local manufacturing. Mindful of how the winds were shifting, it also started offering better financing options to customers and became aggressive with its marketing activities.
“There’s been a lot done from financing options and trade-ins to make products more affordable and give people more options to buy. And so there’s a lot going on there. We are, in essence, taking what we learned in China years ago and how we scale to China and bringing that to bear,” Cook said in the December quarter earnings call in February 2023.
The retail business aside, India is also a strategic manufacturing bet for Apple, which is keen to reduce its dependency on China. Setting up an indigenous manufacturing facility will help it cater to the sizeable local user base for iPhones and develop an export strategy to overcome its supply chain issues from China.
Counterpoint predicts that by 2025, 18% to 20% of all iPhones globally will be made in India, a huge step up from its production at around 3% in 2021 and 5% in 2022. This presents the company a win-win proposition that is hard to turn down.