Apple CEO Tim Cook has opened the tech giant's first physical stores in India, marking a significant milestone for the company in the world's second-largest smartphone market. Cook greeted customers personally and was welcomed by cheering employees at the new outlet in Mumbai on Tuesday. He is expected to attend the opening of a second store in Delhi on Thursday. This move comes as Apple continues to pivot towards India, looking to tap into its potential as both a consumer market and a manufacturing base.
Despite being the world's second-biggest smartphone maker, Apple's 6% share of the Indian market remains small compared to the top five vendors in the country, led by Samsung and Chinese smartphone makers Xiaomi and Vivo. Apple products are considered too expensive by many consumers in the country, where the average salary for full-time workers is 18,585 rupees ($226.5) per month.
Apple's position is expected to grow, however, as it continues to expand its retail presence in India, and more customers switch to high-end smartphones. The country's vast population, rising middle class, and growth potential from the expected switch from basic cell phones to smartphones make it a promising opportunity for businesses.
Previously, Apple had been selling its products in India through third-party resellers or online. This was because, like other foreign retailers, it was restricted from setting up shop in the country unless it sourced at least 30% of raw materials locally. The Indian government eased these restrictions in 2019.
In 2020, Apple launched an online store in India, allowing customers to buy its products and, for the first time, customize certain devices. Apple had previously planned to open its first physical store in the country in 2021, but the Covid-19 pandemic derailed those plans.
Sanyam Chaurasia, a Canalys mobility analyst, said that the new stores would allow Apple to bring all its products "under one roof" and guide more consumers towards purchases. The premium category for smartphones, where Apple sits, "is still driven by brick-and-mortar stores where consumers can touch [and] feel the device,"
Apple first began making iPhones in India in 2017 and has been steadily ramping up its manufacturing there. In recent months, it has notably expanded production in the country after suffering supply chain disruptions in mainland China, which accounts for the bulk of its smartphone manufacturing.
According to Counterpoint, Apple increased its Indian exports significantly last year, with the number of iPhones made and shipped from the country rising 65% compared to the previous year. Two of Apple's top contract manufacturers, Foxconn and Wistron, were also the fastest-growing manufacturers in India during the last quarter of 2022.
Apple's increased activities in India are part of a broader trend of companies diversifying their manufacturing away from China. In recent years, the south Asian nation has grown its share of global smartphone production significantly, from less than 10% in 2016 to almost a fifth projected this year, according to Counterpoint.