Apple Store is the next great initiative to grow India business: Tim Cook

Newly launched Apple online store helped double India sales in end-2020; yet to capitalise on market opportunity, says CEO

Apple Store, a network of branded physical outlets, will be Apple Incs next big initiative to its expand market presence in India. The iPhone maker, which posted record sales in the local market in 2020-end, is now on the right trajectory for future expansion, said global CEO Tim Cook.

The brand, which was once counting on refurbished iPhones to grow its business in the world's second largest smartphone market, is now banking on a multi-pronged approach to grab a larger market share in India. Since it adopted a new market strategy in late-2019, Apple has revamped its operations and market presence, posting better sales in the process. And the debut of its India Online Store in the festive season played a key role in its latest success.

“There are several markets I alluded to before. India is one of those, where our share is quite low. It improved from the year-ago quarter, and our business roughly doubled over that period of time, so we feel very good about the trajectory. We are doing a number of things in the area--we put the online store there for example, and last quarter was the full first quarter of the online store, and that has gotten a great reaction to it and has helped us achieve the results that we got to last quarter,” Cook said in a post-earnings call today.

While Cook did not specify Apple's sales numbers for the October-December quarter for the market, analyst firm Counterpoint Research estimates the company shipped in some 1.5 million iPhones during the period – twice as much as the same quarter previous year. As a result, said CyberMedia Research, Apple's share in the smartphone market doubled to four per cent in the quarter.

With its renewed push, backed by price cuts for newer models like iPhone 11 and iPhone XR and cheaper iPhone SE (2020) models, Apple dominated the premium segment (above-Rs 35,000). As per IDC, in 49 out of the top 50 Indian cities Apple was the market leader during December quarter.

According to Cook, with the market sentiments in its favour, its upcoming physical stores will be the next big step. “We are also going in there with retail stores in the future and so we look to that to be another great initiative, and we continue to develop the channel as well”, he said. According to sources, the first store is being ready at Mumbai and Bengaluru and Delhi are going to be its next destinations.

In fact, Apple's sales surged well ahead of the launch of its India Online Store in late-September and its new iPhone line-up in October. As per Canalys, in the July-September period, some 800,000 iPhones were sold here – highest for the quarter till that time. Superior sales of iPhones and Macbooks did help its topline performance. According to Cook, its sales surged to a historic high for the September quarter in India.

Apple, however, has a long journey ahead. While its market share has grown to over two percent in 2020 and it now features among the top seven smartphone brands, it lags well behind market leaders like Xiaomi (26 percent) and Samsung (21 percent).

Cook acknowledges the fact. “If you take India for example, we doubled our business last quarter compared to a year ago but our absolute level of business there is still quite low relative to the size of the opportunity”, he told investors.

Apart from bringing its global benchmark services to the country and expanding retail presence, Apple is depending heavily on localization of production that helps it slash prices. With its suppliers like Foxconn and Wistron adding capacity and newer models and other global suppliers like Pegatron setting up base here, it is hopeful of gathering further momentum in coming quarters.

According to Prabhu Ram, head of industry intelligence group at CMR, Apple continues its great run driven by the pandemic, and associated remote work and learning conditions. 

Sources said, after it unveils the first Apple Store in Mumbai, Apple's next big bet will be on growing sale of iPhone 12 line-up that is expected to be rolled out from local factories by June.