As the sales of Apple Products have slowed in China in recent years, Apple has taken a more strategic look at its market strategy for India. Apple iPhone sales account for less than 2% of the total number of cell phones sold in the country with one of the fastest growing middle class populations in the world.
According to the WSJ, Apple has proposed its manufacturing plans to the Govt of India in November, requesting for financial incentives to set up operations in the country.
This report is the latest in the Apple India Coverage. 2016 in general saw a lot of initiatives from Apple targeted at the Indian market. There was Tim Cook’s visit to the country as well as tie-ups with some firms to conduct iOS development and research. Apple also acquired an Indian based company in the data mining and AI space this year.
The ruling government of Prime Minister Modi is trying to boost technology manufacturing in the country through the “Made in India” Initiative.
The main Apple Supplier FOXCONN does have a small manufacturing facility in India but most iPhones are still manufactured in China.
In the recent past, Apple had proposed to sell refurbished items in India. The Indian Govt and the local media did not take this proposal by Apple too kindly. Now that Apple is selling refurbished items directly in US and Europe, it may have a chance to do the same in India in the future.
This local manufacturing move by Apple will go a long way to create the momentum that it needs to make deeper inroads into the Indian mobile market place. Although the brand is well established in the luxury segment, there are still no Apple stores in the country. By establishing a manufacturing facility, Apple will be able to convince the Indian Government to allow it to open Apple Stores in the country.
Many customers who want to upgrade into the Apple ecosystem are discouraged by the lack of presence of Apple repair facilities in the country. If Apple is able to open up local stores, staff it with appropriate support and sales staff, more customers will feel comfortable opening up their wallets to the high priced products from Apple.
The other significant customer need in the Indian market is the idea of having dual SIM in mobile devices. Apple has not been able to meet this need so far. Given that Apple is exploring this opportunity, it may make the best sense to manufacture these devices locally and meet the market demand.
It is too early to guess how Apple will position itself in India when it comes to manufacturing and operations. This is however a good move given the market size of the Indian subcontinent. Recent iPhone sales slow down and patent related issues in China calls for a back-up plan on the part of Apple. It is best to explore the abundant opportunities in India as the company moves forward in 2017.