APPLE STORE NEXT BIG STEP TO GROW IN INDIA: TIM COOK

Readies first store in Mumbai; business in the country doubled in Dec quarter

Apple Store, a network of branded physical outlets, will be the iphone maker’s next big step to expand market presence in India. The tech major, which registered record sales in the local market in 2020-end, is now on the right trajectory for future expansions, 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 banking on a multipronged 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 that have resulted in better sales. The debut of its India Online Store in the festive season played a key role in its latest success.

The tech giant posted an alltime record revenue of $111.4 billion globally for the quarter ended December 26, 2020, up 21 per cent year-on-year. International sales accounted for 64 per cent of the quarter’s revenue. “There are several markets I alluded to before, India is one of those, where our share is quite low, it did improve from the year-ago quarter, our business roughly doubled over that period of time, so we feel very good about the trajectory,” Cook said in a post-earnings call.

“We are doing a number of things in the area, we put the online store there for example, and the 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.”

While Cook did not specify Apple’s sales numbers for the October-december quarter for the market, analyst firm Counterpoint Research estimates Apple shipped in some 1.5 million iphones during the period, 100 per cent more than the same quarter previous year. As a result, Cybermedia Research said Apple’s share in the smartphone market doubled to 4 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-~35,000). According to IDC, in 49 of the top 50 Indian cities Apple was the market leader in 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. 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 lateseptember and its new iphone line-up in October. According to Canalys, in the Julyseptember 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 2 per cent in 2020 and it now features among the top seven smartphone brands, it lags well behind market leaders such as Xiaomi (26 per cent) and Samsung (21 per cent).

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 said.

Apart from bringing its global benchmark services to the country and expanding retail presence, Apple is depending on localisation of production that helps it slash prices. With its suppliers like Foxconn and Wistron are adding capacity and newer models and other global suppliers are setting up base, 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.

“THERE ARE SEVERAL MARKETS I ALLUDED TO BEFORE, INDIA IS ONE OF THOSE, WHERE OUR SHARE IS QUITE LOW. IT DID IMPROVE FROM THE YEAR-AGO QUARTER. OUR BUSINESS ROUGHLY DOUBLED OVER THAT PERIOD OF TIME. SO WE FEEL VERY GOOD ABOUT THE TRAJECTORY” Tim Cook

Global CEO, Apple Inc