American multinational technology firm Apple has strengthened its India focus by announcing its 2020 flagship smartphone, iPhone 12, in India. “We are proud to be starting the production of the iPhone 12 in India for our local customers,” Apple said in a statement.
The move, which is a part of Apple’s larger strategy to strengthen its focus in India, will equip the company to cut the government import duties and pass-on the cost-benefit to the end consumers. Through its partners such as Foxconn and Wistron, Apple has already assembled several previous smartphone editions such as iPhone 11 and XR in India.
The move is also crucial for India in light of the growing trade war scenario between the US and China. Over the last two years, many American telecom companies have cut down their output in China and exploring countries like India, the Philippines, and Malaysia for manufacturing opportunities. (See: Will Apple bite India’s manufacturing bait?)
Strategic measures in India
The market share of Apple in India smartphone market share may still be less than 5%. However, it is steadily building focus in India through several tactical measures. The premium smartphone maker has successfully partnered with online majors such as Flipkart and Amazon to sell its previously launched iPhone editions, wearable, and accessories at a heavy discount in India.
Apple is also focusing on accelerating its reach through refurbished smartphones, a segment growing at a pace of well over 10% in India. The company’s refurbished phones in India are also highly sought after due to their low cost, helping many first-time buyers testing Apple’s capabilities without shelling out the exorbitant price.
Additionally, it has collaborated with several banks and financial institutions to offer its premium products at attractive price-points or through cashback offers. Another strategic decision that the company took last year was unveiling its exclusive online store in India. It has started offering nearly the entire line-up of its products and range of services in the country. India has become one of the 38 countries where Apple has launched its online store (See: Apple India debuts online store, eyes more market share).
These measures have helped Apple shipped a record 1.5 million+ iPhone units in India in the quarter that ended in December 2020. Despite that, Apple knows that they have only taken baby steps in the world’s second-largest smartphone market. “If you take India as an example, we doubled our growth last quarter compared to the year-ago quarter. But our absolute level of business, there is still quite low relative to the size of the opportunity,” said Timothy Donald Cook, Apple CEO in 2020.
Apple is also bolstering its online store capabilities by launching a few physical outlets in India, building more trust in its products and services locally.
Emerging markets a focus area
Overcoming the stalled growth due to the pandemic triggered an anxious economic environment. Apple has surprised many soothsayers by achieving a quarterly revenue of $91.8 bn in Dec 2020, a 9 percent increase from the quarter a year ago.
While developed markets like the US, Singapore, UK, France, among others, continue to be the flagbearers of much of this revenue, in terms of growth, there has been a massive upsurge in sales for Apple smartphones in emerging economies such as Brazil, China, India, Thailand, and Turkey.
While Apply may have overlooked India for a long due to its price-conscious structure, it has now understood strengthening focus in emerging economies to lift its market share and prepare for new growth opportunities.
The efforts of Apple to strengthen its focus in India are especially crucial for the company since most of its developed markets are now saturated. And on the contrary, India’s mushrooming digital economy and tech-savvy young generation offer tremendous opportunity for the innovative company Apple to sell its products and premium services albeit with a practical price-point.