To Boost Sales and Manufacturing in India, Apple Opens its First Store
Apple CEO Tim Cook at first retail location in India in Mumbai on April 18. Photo: Apple
On April 18, Apple celebrated the grand opening of its first Indian retail location in Mumbai. Two days later, Apple opened their second Indian location in Delhi. CEO Tim Cook attended the grand opening, celebrating the company’s effort to boost sales and increase production in India.
Currently, Apple does not have a large presence in the Indian market. The company has been present in India for 25 years; however, it only sold its products online or through third-party resellers. Cook reported that India is Apple’s major focus at the February earnings call. Apple accounts for less than 5 percent of the smartphone market share in India; however, it aims to reach that 5 percent threshold soon.
Apple faces the challenge of how to price its products in India to attract consumers while still making a profit, as most Indian consumers do not want to pay for Apple’s expensive products. Apple products must sell at approximately the same price in every country to avoid losing sales revenue to the black market. In India, an iPhone 14 is 79,900 rupees, or $975. India's top 10 percent income bracket starts at 25,000 rupees or $304 per month, making the cost of a brand new iPhone before trade-in greater than three months' worth of income. Many Indian consumers prefer mid and low-tier priced smartphones produced by companies like Xiaomi and Samsung.
Apple is however increasing its presence in the Indian market at the perfect time. Younger generations in India are willing to pay more for phones. Smartphones above $400 accounted for 10 percent of sales instead of 4 percent pre-pandemic. Mumbai and Delhi are two of the wealthiest cities in India, making them lucrative spots for the two new Apple store locations. Apple plans to rapidly expand production and retail in India and aims to make $20 billion in annual revenue from India by 2025.
The new Apple store in Mumbai runs on 100 percent renewable energy. Photo: Apple
Apple also plans to move most of its manufacturing into India. Apple primarily manufactures its products in China, however, recent geopolitical tensions and issues in ‘iPhone City’ in Zhengzhou motivated Apple to begin shifting manufacturing to other countries like Vietnam and India. India now accounts for less than 10 percent of iPhone production. Apple’s long-term goal is to increase that number to 40-45 percent.
Apple’s strategy in India mirrors the strategy used to penetrate the Chinese market ten years ago, when they made a similar aggressive retail and production push upon entering the Chinese market. Now, India may surpass China as the world’s most populous country. It will take several years to make Indian consumers avid Apple consumers, but the Indian market shows great potential for Apple. Apple is unlike any other company due to its size, success and capability of influencing policy and catalyzing growth in a foreign economy as it did in China.
Opening the two retail locations this past week is the first concrete step in Apple’s ambitious plans to increase sales and production of their products in the Indian market. The new Mumbai store runs on 100 percent renewable energy and offers activities and classes to consumers, reflecting Apple’s dedication to building a lasting presence in India.