Apple in India

The chief executive of international major Apple Inc, Tim Cook, is zipping around India, scouting for opportunities. This is a win-win situation. The expanding presence of Apple would further boost the image of Indian technology sector, more so Hyderabad which has already emerged as a major destination for global IT firms.

The company will set up a software laboratory in India to help Indian start-ups and developers. It is also expanding its software development centre in Hyderabad.

The app design and development accelerator is opened in Bengaluru. As the sales of smart phones in United States and China decline, Apple is desperately looking for a market and it finds India as a growth centre.

The increasing presence of Apple is expected to give boost to India’s quest for foreign investment and provide a fillip to ‘Make in India’ and the start-up mission.

Apple wants to repeat China in India. But, it is certainly a gigantic task given the disparity between Indian and Chinese economies. Indian consumers have relatively much less disposable incomes than Chinese, thus making Apple smart phones still a luxury.

Per capita economic output in India today is 31 per cent less than that in China a decade ago, indicating the difference between the two Asian markets, which Apple has to discover. Over 100 million smart phones were sold in India last year. This is expected to grow by another 25 per cent this year. India is world’s third largest smart phone market.

Apple’s iPhone has only two per cent market share. But iPhone sales in India grew by a whopping 56 per cent in the first three months of 2016, indicating the craze for it. This data justifies why the Indian market has a lure for Tim Cook.

India is, therefore, right in trying for the expansion of Apple eco system in India through greater presence of its production facilities and innovation activities to provide jobs to enable the country to reap the demographic dividend.

Mobile phones including smart phones are increasingly becoming an attainable luxury for the Indian consumer. India has denied permission for sale of second hand iPhones aimed at encouraging production in India.

Apple‘s commercial footprint is still very weak in India. Analysts estimate that Apple has penetrated to only one per cent of around one million shops, market stalls and websites that sell phones in the country.

Apple should realise that it faces competition in the Indian market. For instance, Taiwanese electronics manufacturer Foxconn which makes iPhones announced its intentions to invest $ 5 billion in factories, research and development across India.

Therefore, Apple should give high priority to ‘Make in India’ to make the partnership robust and a win-win. Even its unique operating system presents a challenge for Apple’s expansion into the Indian market. About 81 per cent of all smart phones sold worldwide run on Android mobile operating system, a Google’s innovation, according to Gartner.

Low cost smart phones in India run on Android OS. This presents a challenge to Apple to attract more consumers in India.

Let’s hope that Tim’s visit to India breaks the bottlenecks and opens new vistas for a more productive Apple-India partnership.