So, what’s Cooking for Apple in India?
Tim Cook’s visit to India was a very eventful one. Quartz very brightly observed that Cook had completed the holy trinity of India — Bollywood, cricket and religion in just two days. But his visit to India had reasons far beyond experiencing the ‘Indian-ness’ of this holy trinity.
Cook had visited Bengaluru, Hyderabad and Delhi, to meet some of the country’s leading businessmen and politicians, including Narendra Modi, whom he met in Silicon Valley last year and discussed the possibility of introducing Apple Pay in India and Maharashtra Chief Minister Devendra Fadnavis, in whose state, Foxconn, the world’s largest electronic components manufacturer will be setting up a plant to produce iPhones among other smartphones. The list further included Tata Group Chairman Cyrus Mistry, Vodafone CEO Sunil Sood, Telangana Chief Minister K Chandrashekar Rao, Information Technology Minister K Rama Rao and Bharti Airtel Chairman Sunil Mittal.
Tim Cook’s India tour came after his eye-grabbing visit to China, where he announced a $1 billion investment into Uber China’s rival Didi Chuxin. While China is one of the most important markets for Apple, India is not too far down its priority list. Cook’s visit was more important for Apple than it was for India.
Expansion of Apple and iOS was primarily the reason for Cook’s focus on India. For this, Apple had announced the creation of a design and development accelerator in Bengaluru, to provide special support to app developers in India. Additionally, it plans to set up a development center in Hyderabad to give a boost to its map product, a project that is expected to generate 4000 jobs for India’s youth. Apple is also looking for government approval to set up retail stores and sell products online. This comes after the Indian government rejected Apple’s proposal to import and sell refurbished phones in India, a strategy, they believed would help them penetrate deeper into the country’s price sensitive smartphone market.
India has not been a particularly welcome host to Apple’s efforts to sell their premium phones in the country. The Indian government had continuously been increasing import duties every successive budget, discouraging imports from China, a move that is expected to push companies in India and abroad to manufacture locally. Apple has had a tough time dealing with these barriers, as indicated by the fact that iPhones are among the most expensive in the world here in India.
India’s economy, however, increasingly stands out to make the country’s market look lucrative and welcoming. While it is the only stable major economy in the highly volatile global economy, it also boasts of being the fastest growing major economy in the world, with a growth rate of about 7.4%. India’s smartphone market, in specific, has numerous opportunities in store for global investors as well. It is not only the second largest smartphone market in the world, but also the fastest growing one. Tim Cook noted that India’s smartphone market today is similar to China’s market about 7–8 years ago in terms of network and market economics.
China’s market about a decade ago may be Apple’s dream market, but its current market looks gloomy for Apple’s future plans and ventures, making India more relevant in the tech giant’s scheme of things. Apple has been experiencing stagnating or plunging sales in its largest markets outside the United States, namely the West and China.
India, on the other hand, has been a silver lining in Apple’s otherwise bleak prospects worldwide. Apple currently occupies 2% of India’s smartphone industry. India’s Apple story, luckily for Cook, doesn’t end at a meagre market share figure, making his plans for India all the more important. Apple’s sales in India grew 56% year-on-year in the first quarter of 2016 from 76% growth year-on-year in the last quarter of 2015. It is safe to assume that Cook now sees his dream market taking shape in India.
Steve Jobs famously remarked that the people in India are not just pure rational thinkers, but the great spiritual ones also had an intuition. While he fell in love with the country for the spiritual enlightenment that it endowed him with, he always thought of the Indian smartphone market as one that wasn’t ready for the iPhone yet, excluding this market from Jobs’ grand strategies for his products. After all these years, India stands tall as a land of opportunities for the company and the burden of capturing this market lies with his successor, Tim Cook. Apple’s success story in India is yet to be written, and how Cook writes it remains to be seen. If history is any indication, Apple will find itself creating yet another masterpiece.
