Tim Cook opens first Apple store in India

By Michelle Toh, CNN

Apple’s CEO Tim Cook is in India this week to open its first physical stores in the country, marking a milestone for the iPhone maker in the world’s second largest smartphone market.

Cook was seen personally welcoming customers as employees cheered and clapped at the company’s new outlet in Mumbai, which opened Tuesday. He is widely expected to appear at a second store opening in Delhi on Thursday.

The move comes as the world’s most valuable company continues to pivot to India, eyeing its potential as both a consumer market and manufacturing base.

In a statement Monday, Cook pointed to Apple’s ongoing expansion in the country, saying its brick-and-mortar launch coincided with its 25th year of operating there.

“India has such a beautiful culture and an incredible energy,” he said. “We’re excited to build on our long-standing history — supporting our customers, investing in local communities, and working together to build a better future.”

In a separate statement Monday, Apple shared a peek of its new Mumbai store, located at a property owned by Reliance Industries, the conglomerate of Indian tycoon Mukesh Ambani.

The company bills the store as one of its “most energy-efficient” in the world, saying solar panels allow it to run solely on renewable power.

Apple did not respond to a request for further comment, or details of Cook’s visit.

Retail ambitions

Apple is the world’s second biggest smartphone maker, behind Samsung, but its 6% share of the Indian market remains small.

It is dwarfed by the country’s top five vendors, which are led by Samsung and Chinese smartphone makers Xiaomi and Vivo. Apple products are considered too expensive by many consumers in the country.

In India, the average salary for regular full-time workers is 18,585 rupees ($226.5) per month, according to the most recent government statistics. For comparison, an iPhone 14 starts at 79,900 rupees ($973.6), while an iPhone SE, a lower-cost model, starts at 49,900 rupees ($608.2).

Apple’s position is expected to grow, however, as it continues to build out its retail presence there and more customers turn to high-end smartphones.

India holds promise for businesses because of its vast population, rising middle class and growth potential from consumers who are expected to make the switch from basic cell phones to smartphones, according to Counterpoint Research Associate Director Hanish Bhatia.

Until now, however, Apple had been selling its products there online or through third-party resellers.

That’s because the company, along with other foreign retailers, was restricted for years from setting up shop in the country unless they sourced at least 30% of raw materials locally, forcing them to rely on local partners. The Indian government eased restrictions in 2019.

In 2020, Apple launched an online store in India, allowing customers to buy its products and, for the first time, customize certain devices.

Apple had previously planned to open its first physical store in the country in 2021, though that was derailed by the Covid-19 pandemic.

Sanyam Chaurasia, a Canalys mobility analyst, said the stores would allow Apple to bring all its products “under one roof” and guide more consumers toward purchases.

The premium category for smartphones, where Apple sits, “is still driven by brick-and-mortar stores where consumers can touch [and] feel the device,” he told CNN.

Prachir Singh, a Counterpoint Research senior analyst, also said the locations of the new stores were critical, with Delhi and Mumbai each making up the top two Indian markets for Apple, respectively.

Mumbai, for example, typically contributes to 10% of overall iPhone sales in India, Singh said.

Manufacturing powerhouse

Apple first began making iPhones in India in 2017 and has been steadily ramping up its manufacturing there.

In recent months, it has notably expanded production in the country after suffering supply chain snags in mainland China, which accounts for the bulk of its smartphone manufacturing.

Apple increased its Indian exports significantly last year, with the number of iPhones made and shipped from the country rising 65% compared to the previous year, according to Counterpoint.

Two of Apple’s top contract manufacturers, Foxconn and Wistron, were also the fastest-growing manufacturers in India during the last quarter of 2022, the firm said.

Last month, Foxconn CEO Young Liu also spent a week in the country and met Prime Minister Narendra Modi.

In its statement Monday, Apple said the company was working with suppliers to “produce a growing number of components” along with its assembly lines for iPhones.

“Apple’s work with Indian suppliers of all sizes supports hundreds of thousands of jobs across the country,” it said.

The company’s mobile apps business has also swelled to support more than 1 million developer jobs in the nation, it added.

Apple’s increased activities in India are part of a broader trend of companies diversifying their manufacturing away from China.

In recent years, the south Asian nation has grown its share of global smartphone production significantly, from less than 10% in 2016 to almost a fifth projected this year, according to Counterpoint.

— CNN’s Manveena Suri contributed to this report.

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