In July 2008, Apple Inc. opened its first retail store in China, marking the beginning of meteoric growth in the country. Fifteen years later, Chief Executive Officer Tim Cook is giving the same blessing to India. It’s clear that the world’s most valuable company should already be hanging its shingle in the world’s most populous country, yet there’s a cautionary tale not only from its time in China, but also from its chief rival.
When hundreds of people lined up for the opening of that first store in Beijing, the nation was barely a blip on Apple’s revenue radar. By the next fiscal year ending September 2009, China and Hong Kong combined generated revenues of $769 million, 1.8% of the global total. This figure grew to $12 billion, or 11.5%, over the next two years.
India is now at that stage. Apple’s sales in the country rose nearly 50% to nearly $6 billion since March 31 last year, Bloomberg News reported on Monday, citing a person familiar with the matter. This is an impressive jump considering the global slowdown in gadget sales across categories. Yet that still only accounts for 1.6% of company-wide revenue, and about 8% of what the iPhone maker currently gets in Greater China.
In opening two stores this week – the first in Mumbai and the second in New Delhi – Cook’s move can be seen as either driving business into an important market, or simply jumping on the bandwagon of an already existing growth Is. There certainly doesn’t seem to be a downside given that they have also prompted suppliers such as Foxconn Technology Group, Wistron Corp and Pegatron Corp to increase production in the country. While local manufacturing avoids import taxes imposed by Prime Minister Narendra Modi’s government, exports are also playing a growing role, with outbound sales of handsets climbing 67% in the 12 months to December 31 to $7.1 billion, according to India’s commerce department. has exceeded. ,
According to Counterpoint Research, Chinese brand Xiaomi dominated the market in India in units shipped last year, followed by Samsung, Vivo, Realme and Oppo. Apple isn’t among the leaders unless you consider share by value, where the iPhone is at the premium end. By that metric, the American company is second only to its South Korean nemesis. More importantly, Apple — which has far fewer discrete models than the other players — occupied the top three spots with various iterations of the iPhone 13.
It’s easy to see why Apple’s future could be bright. With its high-priced device appealing to India’s middle class and its increased spending power, the Cupertino-based company is building loyalty it can use to sell other products: Airpods and Apple Watch Will pair well with that attractive new handset. And from there, attract them to a growing range of services that include Apple Music, Apple TV+, iCloud and more. Samsung, as the key rival in the Android camp, also makes devices locally and has done well to build a loyal fanbase.
There’s a lot to navigate along the way, though. India lags far behind China in key aspects important to manufacturing, including infrastructure, bureaucracy, attention to detail, and even a sense of urgency. If Apple has to rely on India for domestic supplies, and demand grows faster than production, growth could be affected. Yet as these issues settle, a great deal of political risk emerges. Further revelations of poor worker conditions, or a mutiny at a local factory, could turn India’s population bitter towards the American giant.
Apple has already experienced this in China. In 2015, this sector accounted for 25% of total sales, but then began to decline. The next year, Beijing banned iTunes and iBooks stores, and rising nationalism, coupled with rising tensions with the US, saw the Apple brand lose some of its luster. Yet no company has suffered more at the hands of consumer backlash than Samsung Electronics Co.
When Apple’s first Chinese store opened, the best names in smartphones were Nokia, HTC, Motorola and Samsung. Shortly after, the first three started to decline but Samsung held on. As of 2013, Samsung has acquired Huawei Technologies Co. With Apple leading a rising challenger and Apple enjoying its place on the premium list. As was the case with India recently, iPhones were not the leader in terms of shipments, but tended to dominate in terms of value.
For a while, Samsung enjoyed leadership in both price and shipments, a sign that it was hitting the right price point to gain broad appeal from Chinese consumers. But Huawei came out strong, Xiaomi went from cheap to premium, and then 2016 saw dozens of Samsung Note 7 handsets randomly catching fire across the planet. Within a few years most of the world had forgiven Samsung and started buying again, but not China. The South Korean company did not issue a local recall for this model, leading to protests among buyers. Before long Samsung wasn’t cool anymore.
There was a time when it was hard to think of a Nokia that didn’t have the hippest device out there, and then Samsung was the “it” brand. Apple is now in most parts of the world. For a growing section of Indian consumers, the iPhone is an aspirational product. Great design, consistently high product quality, and interoperability across Apple devices and services make it a perennial favorite.
That’s the kind of positive outlook Cook is enjoying this week as he launches Apple’s retail experience in India. It is a feeling that lasts for many years. But it is a journey that will prove to be bumpy and uncomfortable along the way.
This news is auto-generated through an RSS feed. We don’t have any command over it. News source: Multiple Agencies: hindustantimes, techrepublic, computerweekly,