Will Tim Cook’s India Visit Prove Fruitful For Apple

by Priyanka Pugaokar    May 17, 2016

Tim Cook Apple CEO Tim Cook is reportedly visiting India to meet Prime Minister Narendra Modi. According to the report published in Reuters, Cook, who has proposed his visit to India this week, is expected to discuss new growth opportunities in the country. Since Apple has posted its first ever decline in iPhone sale and drop in revenue in Q2 of 2016, India has emerged as the new hope for the company. Hence, Cook’s visit has become very crucial for Apple’s future roadmap in India. 

Apple recently revealed its second quarter results posting a first ever drop in iPhone sales and revenue since 2003 and its revenue stood at $50.6 billion at a decline 9 per cent. Apple’s revenue in Greater China, which is considered to be its largest market after US fell 26 per cent from a year earlier. The numbers are clear enough to show Apple’s struggle in the developed markets. Surprisingly, Apple’s India business grew by 56 per cent. Though iPhone currently holds only about 2 per cent market share in India, the company expects a double digit growth in coming years. 

Will Cook pave way for refurbished iPhone sale?   

After mounting pressure from smartphone brands on Apple’s proposal to import and sell refurbished iPhones in the country, the government has disappointed Apple by rejecting its proposal. Apple’s rivals have mounted a public campaign against the proposal, arguing that such a move would defeat the ‘Make in India’ initiative and would also trigger a flood of used electronics in the market. In his meeting with the PM, Cook is expected to pave way for refurbished iPhone sale in order to escalate the growth. 

The efforts are also seen as Apple’s strategy to come out of the shade of a ‘Premium handset’ vendor. Apple always maintained its marquee image with premium category offerings. However, this strategy negatively impacted Apple’s growth in the mid premium segment. Acknowledging the fact that Indian smartphone market is largely dominated by mid premium category, Apple intends to push refurbished phones among cost-conscious buyers in the country. 

Efforts to widen retail reach   

Apple has accelerated expansion in India in the last 18 months, including widening its retail reach to smaller shops. Apple is reportedly opening Apple Stores in Delhi, Bangalore and Mumbai by 2017. The company is reportedly investing about $3 million to $5 million in each store. Apple has applied for a license to open single brand stores which is still under consideration. Cook is expected to try to expedite the approval procedures with the ministry. 

Also Read: Is India Apple’s Next Growth Market After China?

India tops on Apple’s global strategy 

Apple is now looking to develop India as a market after reaching at a point of saturation in China. Counterpoint Research said iPhone sales in the January-March period in India hit a record 630,000 units and the market tracker now forecasts they will rise to 3 million in the calendar year, compared with just over 2 million in 2015. 

The Smartphone maker is optimistic about the 4G rollout and its potential in the coming months. With telcos such as Bharti Airtel, Vodafone India and Idea Cellular and Reliance Jio Infocomm are extending 4G networks across the country, the company expects that better network and broadband will unleash the power and capability of the iPhone.

Though Apple is betting big on the India market, stiff competition among the domestic and global smartphone makers and high segmentation of the smartphone market are the key obstacles in Apple’s growth journey in India. Cook in his visit to India is expected to address the challenges and create new growth prospects.