Apple India sees strong growth after years of (meticulous) planning

There are a huge number of developers in India

Apple’s attempts to migrate manufacturing to India will translate into tangible benefits that should help the company double iPhone sales there, analysts claim.

What is happening with Apple in India?

Apple’s been working hard to open up business in India for the last few years. To this end it has negotiated closely with government at a national level, invested in strategic assets particularly in Bangalore and is on track to open retail stores there, beginning with the recently launched Apple India online store.

• The company is working with its manufacturing supply chain, which is now opening up in India. Pegatron will invest $150 million to open three factories there.
• Foxconn and Wistron already assemble the iPhone XR, the iPhone 11 and the iPhone SE 2020 in India.
• iPhones manufactured in India are thought to be sold internationally.

These attempts are paying off

• India now recognizes Apple as investing in the nation.
• Apple has become an important employer in India.
• India’s army of talented iOS developers is growing.
• Apple’s market share is increasing.

Apple may soon be able to avoid the 22% surcharge currently applied to iPhone prices as the devices are manufactured outside India – translating into lower cost iPhones for customers in India.

Apple CEO Tim Cook had been expected to visit India this year, but that visit now seems to have been postponed, likely in response to COVID-19.

Apple launched its first online retail store in India in September 2020.

What the analysts are saying

Speaking to Asia Time Financial, Canaly research director, Rushabh Doshi said:

“With gradual lowering and rationalisation of prices over the years, suddenly iPhones in India have become more affordable and reachable than other premium smartphones.

“Making in India enables Apple to lower the prices because it doesn’t have to pay the import duty (of 22%) for importing handsets.”

The analyst also observed:

“The appetite for smartphones is definitely high for Indian buyers of premium handsets, and iPhone is just one of the only three (Samsung and One Plus are the others) choices now available in the market.”

In the background, Apple continues to reduce the price of older iPhone models in India. Hours after the introduction of iPhone 12, the cost of the iPhone 11 was reduced by $200, for example.

iPhones — and the components inside them — are manufactured and sourced from around the world

What are the visible impacts of all this work?

In October, Apple CEO, Tim Cook, said the company:

“set a September quarter record in India, thanks in part to a very strong reception to this quarter’s launch of our online store in the country.”

Apple aims to double its iPhone sales in India by September 2021. At present it sells around a million units in India annually, so as prices reduce and Apple’s identification with India’s market improves, this should help it achieve this target.

Fertile ground for a supercycle?

One recent report claims local demand for the new iPhone 12 range is high.

“The newly-launched iPhone 12 and 12 Pro for which pre-orders were thrown open in India on October 23 have done tremendously well at Apple Authorised resellers who have received record pre-orders riding on cool, exciting offers,” that report said.

“Trade sources told IANS on Wednesday that the pre-orders for the new iPhones this time are super high…”

GfK India recently claimed online smartphone sales in India climbed to 32% this year, and 43% of premium devices such as iPhone. In another sign of change, Counterpoint Research recently told usApple has overtaken market leader OnePlus in premium smartphone sales in the nation.

What’s open to question is if Apple’s iPhone in India, buoyed by the iPhone 12 supercycle and a local market seeking alternatives to Chinese brands will exceed on Apple’s targets in the next year? I think this is quite likely.

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