AFP/The Hindustan Times
New Delhi, 22 June 2016
gleaming glass atriums and blue-clad “geniuses” that herald the arrival
of an Apple store could soon be landing in India, after the government
cleared the way for it to open in the rapidly growing smartphone market.
Before now, the Silicon Valley giant has been just a bit-player in the
country of 1.2 billion, selling through local shops with none of its
It applied to open stores in January, but was reportedly rebuffed
because of a diktat that states foreign retailers must source 30
percent of their products locally.
But on Monday New Delhi relaxed the rules, just weeks after Apple chief
Tim Cook toured India on a breathless charm offensive where he was
pictured using Prime Minister Narendra Modi’s gold iPhone to launch the
premier’s own app.
Companies making state-of-the-art technology -- understood to include
Apple -- now have up to eight years to meet the sourcing requirements
under a waiver, part of a push by India’s pro-business government to
attract foreign investment and create jobs.
For Apple, which saw iPhone sales dip for the first time ever in the
second quarter due to slowing demand in China and the United States,
India is a tantalising prospect.
While analysts say it currently accounts for only around one percent of
global iPhone sales, its giant population and low number of smartphone
owners relative to its size mean it is a huge potential market.
not really seen India as an important enough market in the past, but
somewhere, the penny has dropped,” Devangshu Dutta, chief executive of
retail consultancy Third Eyesight, told AFP.
Apple’s vast, hands-on stores are designed to become destinations in
their own right, analysts say, luring potential customers with the
promise they can play without buying.
“The store is
not just a place to do business -- it acts as a live billboard for the
brand,” Dutta said.
Browsing mobile accessories in FutureWorld, a technology retailer in
New Delhi’s Connaught Place, Aryamaan Chauhan said he would
“definitely” visit an Apple store if one opened in the city.
The 19-year-old IT student owns an Android smartphone, bought for about
20,000 rupees ($295), but is considering switching loyalties.
“Money is what’s stopping me. My budget is low, I can’t afford it,”
“Now, I think most Indian people prefer Android but they are shifting.
After graduation I will buy an iPhone.”
With a basic iPhone starting at almost $600 -- more than in many
countries, thanks to India’s high taxes -- they are wildly unaffordable
for most in a nation where average incomes are less than $1,600 a year.
Handsets costing under $100 dominate the market, many of them made by
Chinese manufacturers such as Xiaomi or Huawei.
“It won’t become mass-market, (Apple) will always be a niche player.
This is a very cost-conscious market,” Vishal Tripathi, research
director at Gartner, a technology research firm, told AFP.
“But there is a growing number of consumers who like Apple.”
By pricing itself exclusively at the luxury end, Apple has
distinguished its brand from arch-rival Samsung which has both low-cost
and high-end phones.
“Indian consumers are always under the notion that more expensive means
better and consider carrying an iPhone as more of a status symbol than
anything,” said Bhasker Canagaradjou, the head of Ipsos Business
Consulting in India.
“The brand enjoys a very strong aspiration value, especially among the
For now, Apple has given no indication when or if it plans to open its
own stores. But if it does, it will eventually have to meet strict
sourcing rules as the government exhorts companies to manufacture in
The company will require factories that can produce its exacting,
cutting-edge products -- something India largely lacks.
“To create a
local supply chain, it takes time. They will be able to operate stores
and benefit from stores in the meantime,” said Dutta.
Foxconn, the major Taiwanese Apple supplier which also assembles
products for Sony and Dell, is spending billions of dollars setting up
factories in India.
The iPhone is not yet on the production line, but Canagaradjou says he
believes Apple could start manufacturing in India “in the next one or
However, while its stores may arrive in India soon, analysts don’t
expect to see legions of Apple superfans camping out to buy new
releases as they do in other countries any time soon.
“If someone is expecting a replication of how it is in other markets,
people queueing up outside the stores from 3:00 am, I don’t think
that’s going to happen,” said Tripathi of Gartner. “In India, people
prefer to sleep until late.”