NEW DELHI, India (AP) - Apple Inc. will open its first flagship in India on Tuesday in a launch that is highly anticipated and highlights the company’s aspirations for expansion in a country they hope to transform into a manufacturing hub.
The grand opening was attended by dozens of people. The store is located in Mumbai, India's financial center. Its design was inspired by the black-and yellow taxis that are unique to this city. The second store is set to open in New Delhi, the capital of India.
In a statement, Tim Cooke, the CEO of the company, who is currently in Mumbai, stated that India has a beautiful culture with an incredible energy. We're excited to continue our long history.
The tech giant is operating in India since more than 25 year, selling their product through authorized retailers as well as the website they launched a few short years ago. The pandemic and regulatory obstacles delayed the opening of a flagship store.
Jayanth Kolla of Convergence Catalyst said that the new stores were a sign of Apple's commitment in investing in India. India is the second largest smartphone market worldwide, where iPhone sales are steadily increasing. He added that the stores demonstrate 'how important India is to the future and present of the company.
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The sheer size of the Indian market is a major attraction for the Cupertino-based California company.
Counterpoint Research Vice President of Research Neil Shah said that only 600 million Indians have smartphones.
According to Counterpoint data, between 2020 and 2022 the Silicon Valley firm gained ground on the smartphone market of the country. It went from 2% to 6%.
The iPhone is still out of reach of most Indians due to its high price.
Shah claims that iPhone sales have been booming among the upper-middle class and wealthy Indians who are able to afford the devices. This segment is growing. Apple, according to Counterpoint, has a 65% share of the premium smartphone market. Prices start at 30,000 rupees (about $360).
Apple announced in September that it would begin manufacturing its iPhone 14 within India. The announcement was welcomed by Prime Minister Narendra modi's government. Since he took office in 2014, he has been pushing for local manufacturing.
Apple began to manufacture from India with the iPhone SE in 2017. Since then, it has continued to assemble several iPhone models.
Apple has been asking to move some production overseas in 2020 after COVID-19 shutdowns disrupted the global flow of its products.
Kolla said that 'big companies were shocked into realizing they had to have a back-up strategy outside China. They couldn't afford another lockdown, or any geopolitical conflict, which could affect their business.'
Counterpoint Research reports that India currently produces close to 13,000,000 iPhones per year. This is up from less than five million iPhones three years ago. It is estimated that India produces about 6% of all iPhones worldwide. This is a tiny fraction compared to China which makes 90%.
India's Commerce minister Piyush Goyal stated last week that Apple was regularly in touch with the government to support its business in India and that Apple had plans for 25% of global production to come from India within the next five-year period.
According to Shah, the challenge for Apple is that raw materials still come from outside India. The tech company must either find a local provider or bring its suppliers, who are based in China, Japan, and Taiwan, close to India to increase production.
He's still optimistic that this target can be achieved, particularly because labor costs are lower in India, and the government is offering attractive subsidies to encourage local manufacturing.
Apple is all about timing. Apple doesn't enter the market until it is confident in its prospects. Shah said that they can see an opportunity in this market today. It's a win/win situation.