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Too Huge To Ignore: Apple Is Finally Paying Attention To India

2016 has seen a shift in Apple's outlook on the Indian market.

21/12/2016 4:15 PM IST | Updated 21/12/2016 6:03 PM IST
Adnan Abidi / Reuters
A salesman checks a customer's iPhone at a mobile phone store in New Delhi, India, July 27, 2016. REUTERS/Adnan Abidi

There are many Indians who own iPhones and are devoted Apple fans, but it was not until the beginning of this year that Apple began paying attention to India. While Chinese smartphone manufacturers have always treated India as a priority market, the Cupertino, California-based electronics and digital giant has taken a much more reserved approach.

In January, reports began to emerge that Apple was in the process of opening their own stores in India. Apple stores have always been a big thing across the globe. Until now, the company has only had authorised and premium re-sellers of its products in India. However, the company had to resubmit its proposal to the government because of some process issues. And, there has been no clarity till date about when the iPhone maker will be able to open its stores in India.

Richard Drew/Associated Press

Apple CEO Tim Cook has been audacious enough to flip his stance on India's smartphone market quickly. In April, he said that India was seven years behind China in terms of market potential.

"If you take a look at India, we grew by 56 percent, and we're placing increasing emphasis in these areas [emerging markets], where it's clear there will be disproportionate growth versus the more developed areas," Cook said in the earnings call where Apple's sales had dropped for the first time.

"Smartphones that are working there are low end, primarily because of the network and the economics, the market potential has not been as great there. But I view India as where China was maybe seven to ten years ago from that point of view, and I think there's a really great opportunity there," he added.

Come May, Cook visited India with a team from Apple. Besides the business meetings, he did some touristy albeit high-profile things that were duly covered by the Indian media. He went to the Siddhivinayak Temple in Mumbai, attended a Bollywood bash hosted by long time Apple fan, Shah Rukh Khan, and even watched an Indian Premier League cricket match.

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Apple chief executive Tim Cook greets onlookers as he leaves the Taj Mahal Palace hotel in Mumbai on May 18, 2016.

During his visit, Cook also met Reliance Chairman Mukesh Ambani, Maharashtra's Chief Minister Devendra Fadnavis, CEOs of Vodafone and Airtel, and Prime Minister Narenda Modi. Apple was planning on selling refurbished phones in India. The idea was to lure the famously cost-conscious Indian user into the Apple ecosystem. However the India government played spoiler, denying the company this opportunity.

During his visit, the Apple CEO also inaugurated an iOS developement and design centre in Bengaluru and an Apple Maps development centre in Hyderabad. The company is also keen on setting up a startup accelerator in the country.

During Cook's India visit, Apple was denied permission to open company branded stores because Apple didn't meet the 30 percent local-sourcing norms. But within weeks, it was reported that the company might be allowed a 2-3 year relaxation from this norm.

Cook's tone changed somewhat when Apple recorded 51 percent growth in sales over the previous three quarters as reported in July. China sales had taken a hit and now India was "one of the fastest growing markets" according to him. This was when the company had just announced the new iOS 10, MacOS Sierra and WatchOS 3 at its WWDC conference.

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PARIS, FRANCE - DECEMBER 03: A customer checks an iPhone 7 inside the new Apple store Saint-Germain during the first opening day on December 03, 2016 in Paris, France. This store employs 120 people and has an area of 1,300 m2, it is the largest in the capital and it is the first in France to embrace the new design codes chosen by Apple for its shops. Apple store Marche Saint-Germain is the third store in Paris, the 20th in France and the 110th in Europe and will be the 489th in the world. (Photo by Chesnot/Getty Images)

In September, the so-called Apple big event was held in San Francisco. The iPhone 7 and iPhone 7 Plus were unveiled. People furiously debated about the controversial removal of the 3.5 mm headphone jack, while some praised the the iPhone 7 Plus' new dual camera. The next day it was announced that iPhone 7 would be sold to India in October at a starting price of ₹60,000. The company began selling iPhone 7 from 7 October and there were massive lines outside stores.

In Apple's last earnings call, Cook was buoyant about India. He applauded Reliance Jio for laying out a successful 4G network in the country. Apple had sold 50 percent more iPhones in India compared to the previous Q3.

"Looking ahead, we're seeing some very exciting developments in India," he said. "Reliance Jio is rolling out a first of its kind all-IP network in India with 4G coverage in 18,000 cities and 200,000 villages across the country. They're offering a free year of service to purchasers of new iPhones and we're partnering with them to ensure great iPhone performance on their network."

Notably, Apple ranks second in India in terms of overall sales revenues, after Samsung. Immediately after the demonetisation announcement, over 1 lakh iPhones were sold in just three days.

Recent reports suggest that the company is mulling over the possibility of manufacturing iPhone in India. One of the biggest iPhone manufacturers, the Chinese company Foxconn, already has a presence in India. A year ago, when Prime Minister Modi visited the US, he invited Cook to produce phones in India.

If Cook actually takes up Modi's invitation, Apple can easily open their own stores in India and sell iPhones at a lower price. The coming year is going to be important for the company as it is planning a major iPhone redesign ahead of the pioneering smartphone's tenth anniversary. There are plenty of Apple fans in India who'd love to get a byte of the Apple pie.

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