Apple Inc. is making significant strides in enhancing its presence in India, the world’s second-largest smartphone market, by planning to open four additional retail outlets. These stores are expected to be established in key urban centers: Bengaluru, Pune, Delhi-NCR, and Mumbai, further building upon the company’s initial foray into the region with its first two stores inaugurated in Mumbai and New Delhi last year. The U.S. tech giant has expressed enthusiasm about expanding its team as part of this initiative, reflecting a commitment not only to increasing retail accessibility but also to engaging with the diverse customer base in India. Deirdre O’Brien, Apple’s Senior Vice President of Retail, articulated the company’s excitement about channeling local creativity and passion, expecting to offer Indian consumers even greater opportunities to explore and engage with Apple’s renowned products and services.
Focus on Domestic Manufacturing
In tandem with its retail expansion, Apple has also embarked on an ambitious localization strategy by commencing domestic production of the iPhone 16 Pro models in India. This initiative marks a significant step in Apple’s ongoing effort to diversify its manufacturing footprint away from China—an imperative move considering the geopolitical uncertainties and supply chain disruptions that have plagued the tech industry in recent years. Apple initiated its manufacturing journey in India back in 2017, starting with the iPhone SE model, but this latest development underscores the company’s intensified focus on the Indian market, particularly for the premium segment represented by the Pro models.
Despite Apple’s strategic moves, analysts report that the pace of shifting iPhone production to India is slower than anticipated. According to J.P. Morgan’s analysts, the expectation is that by 2027, 20-25% of iPhone production will be based in India, a timeline that has been extended from earlier estimates which hoped to achieve similar figures by 2025. Currently, production in India is estimated to represent only 10-15% of global output, illustrating the challenges Apple faces in scaling up operations rapidly. However, the growing demand for smartphones in India presents an opportunity that the company cannot afford to overlook.
The financial figures regarding Apple’s performance in India are particularly compelling. The company’s revenue surged by 42% year-on-year in 2023, reaching $8.7 billion, as reported by Morgan Stanley. Additionally, iPhone shipments soared by 39%, totaling 9.2 million units, a performance that positions India as the fifth-largest market for iPhones globally. Notably, this growth indicates that India’s contribution to Apple’s business is now surpassing that of any individual country within the European Union. As Apple continues to navigate its expansion in India, it underscores both the strategic significance of the market and the potential for future growth amidst evolving consumer preferences and competitive dynamics in the smartphone sector.
Apple’s simultaneous focus on expanding its retail presence while boosting local manufacturing reflects a calculated strategy to solidify its standing in India. The blend of retail innovation and local production not only caters to an emerging class of consumers but also positions Apple favorably within an increasingly competitive global landscape.