INSUBCONTINENT EXCLUSIVE:
For a decade, Apple has solely relied on third-party sellers, stores and marketplaces to sell its products in India
That will begin to change this year.
At the company annual shareholder meeting Wednesday, chief executive Tim Cook told investors that
Apple will open its online store in India, the world second largest smartphone market, at some point this year, and set up its first
flagship brick-and-mortar store next year.
I&m a huge believer in the opportunity in India,& said Cook
&It a country with a vibrancy and demographics that are just unparalleled.
TechCrunch reported last month that Apple was planning to open
its online store in Q3 this year and was unlikely to be able to have its brick-and-mortar store ready in the country this year.
India,
perhaps the last great growth market for American technology giants, has been a conundrum for Apple and several firms that sell premium
items.
It a big market that continues to report growth, but most people in the country can''t afford Apple products
In fact, the vast majority of smartphones that ship in India carry a price tag of $150 or lower, according to research firm
Counterpoint.
For Apple, the other challenge has been the heavy import duty that New Delhi levies on electronic items
This has made iPhone even more expensive for people in India, as the company passes the additional cost to customers.
Apple has attempted to
broaden its appeal in India by looking to reduce prices of its handsets
For years, it urged the government to provide it with some tax benefits
When those talks did not materialize, Apple moved to do something that all the Chinese phone makers have done in India: assemble smartphones
locally.
New Delhi provides several incentives to companies that assemble electronic items locally
Two years into the process, Apple contractors Foxconn and Wistron are assembling a range of iPhone models in India, and that has lowered the
prices for a number of models (except those in the current-generation lineup.)
These moves have already proven useful for the company
Apple shipped close to 925,000 iPhone units in India in the quarter that ended in December, research firm Canalys estimated
That figure, up 200% year-over-year, was the iPhone-maker best year in the country to date, the research firm added.
Madhumita Chaudhary, an
analyst with Canalys, said Apple decision to become more aggressive with pricing — partnering with banks to offer more incentives to
customers — helped the company improve its position in a market with 99% Android smartphones.
With iOS 13, Apple delivers new features
to court users in India
Apple has also held discussions with content studios to bulk up its movie and TV show offerings for the Indian
Three years ago, for instance, it was in late stages of talks to acquire the Indian business of Eros Now for $300 million — something
which has not been previously reported — with an option to expand its stake in the publicly listed global company, sources with direct
knowledge of the matter told TechCrunch a few months ago.
But the deal did not materialize.
TechCrunch also reported last month that Cook
may plan an India visit for the opening of the online store
Apple did not comment on that story.
Indiaeased sourcing norms for single-brand retailers last year, which paved the way for companies like
Apple to open online stores before they establish a presence in the brick-and-mortar market.
