Apple opened its first flagship store in India at a much-anticipated launch event, underscoring the company’s growing desire to expand in the country, where it also hopes to become a potential manufacturing hub.
The company’s chief executive, Tim Cook, posed for photos with nearly 200 Apple fans on Tuesday as they lined up outside the sprawling 2,600-square-meter (28,000-square-foot) store at Reliance-owned Jio World Drive mall in India’s financial capital , Mumbai, its design was inspired by the iconic black and yellow taxis unique to the city.
A second store will open in the national capital New Delhi on Thursday.
“India has such a beautiful culture and incredible vibrancy, and we’re excited to build on our rich history,” Cook said earlier in a statement.
The tech giant has been operating in India for more than 25 years, selling its products through authorized retailers and a website it launched a few years ago. But regulatory hurdles and the pandemic delayed its plans to open a flagship store.
“The vibe here is completely different,” said Aan Shah, 23, who traveled from Ahmedabad in neighboring Gujarat state for the launch. “It’s not like buying from some regular store. There’s just no comparison. It’s so exciting.”
Early on, his love for Apple took him to New York and Boston to open new stores, where he had the opportunity to meet Cook.
The store opened to bloggers and tech analysts at a private event on Monday, with a host of Indian film and TV personalities meeting Cook that evening.
Jayanth Kolla, an analyst at tech consultancy Convergence Catalyst, said the new stores were a clear sign of the company’s commitment to investing in India, the world’s second-largest smartphone market where iPhone sales have been steadily rising.
He added that the stores showed “how important India is to the present and future of the company”.
India’s sheer size makes the market particularly encouraging for the Cupertino, California-based company.
About 600 million of India’s 1.4 billion people own smartphones, “meaning the market is still underpenetrated and the growth prospects are enormous,” said Neil Shah, vice president of research at technology market research firm Counterpoint Research.
From 2020 to 2022, the Silicon Valley company has made some headway in the country’s smartphone market, increasing from about 2% to 6%, according to Counterpoint.
Still, the iPhone’s exorbitant price tag makes it unaffordable for most Indians.
Instead, iPhone sales in the country are booming among a small number of upper-middle-class and affluent Indians with disposable income, buyers that Shah says are growing.
According to Counterpoint, Apple has a 65% share of the “high-end” smartphone market, with prices starting at 30,000 rupees ($360).
In September, Apple announced that it would start producing the iPhone 14 in India. The news was hailed as a victory for Prime Minister Narendra Modi’s government, which has been pushing to expand local manufacturing since he took power in 2014.
Apple first started producing the iPhone SE in India in 2017 and has since continued to assemble several iPhone models in the country.
Most of Apple’s smartphones and tablets are assembled by contractors with factories in China, but the company is considering shifting some production to Southeast Asia after multiple shutdowns to fight COVID-19 disrupted its global product flow or elsewhere.
Analyst Kolla said: “Big companies are shocked and realize they need to have a backup strategy outside of China – they can’t risk another lockdown or any geopolitical rift that affects their business.”
India now produces nearly 13 million iPhones a year, up from less than 5 million three years ago, according to Counterpoint Research. That’s about 6% of iPhones produced globally — a small fraction compared to China, which still produces about 90%.
Some products, including iPhones, are being assembled in India by Taiwanese contract electronics makers Foxconn and Wistron as Apple works to make India a bigger manufacturing base. Apple also plans to assemble iPads and AirPods in India.
Last week, Indian Commerce Minister Piyush Goyal said the government was in regular contact with Apple to support their operations in India, where the company plans to source 25% of its global production in the next five years.
According to Counterpoint’s Shah, the challenge for Apple is that raw materials are still sourced from outside India, so the tech company will need to find local suppliers or bring in closer suppliers in countries such as China, Japan and Taiwan. drive production.
However, he is optimistic that the goal will be achieved, especially given India’s low labor costs and the government’s desire for companies to offer attractive subsidies to boost local manufacturing.
“For Apple, it’s all about timing. They won’t enter a dynamic market until they are confident in their prospects. They can see opportunity here today — it’s a win-win situation,” Shah explain.