Apple's first India retail store launch comes amid a booming premium market

Apple CEO Tim Cook recently said India is a "hugely exciting market" for the firm, and the iPhone maker is putting a lot of emphasis on the world's second-largest mobile phone market

Apple is all set to launch its first company-owned retail store in India later this month. The timing of the launch is significant as India is becoming an increasingly important market for the company in terms of sales and manufacturing capabilities. Additionally, there is a growing trend among Indian consumers towards premiumisation.

On April 5, Apple unveiled a barricade of the upcoming retail store, called Apple BKC, that would be situated at the Jio World Drive Mall in Mumbai. The company said it drew inspiration from the iconic Kaali Peeli taxi art unique to Mumbai, which includes "colourful interpretations" of the decals combined with several Apple products and services that will be available to its customers.

In recent quarters, Apple executives have mentioned several times that they are witnessing record revenue growth in terms of iPhone sales in India, registering a strong double-digit increase every quarter.

Apple chief executive officer Tim Cook stated during the company's earnings conference call in February 2023 that India is a "hugely exciting market" for the Cupertino tech giant, and the iPhone maker is putting a lot of emphasis on the world's second-largest mobile phone market. Apple also witnessed "record levels" of people switching to iPhone in the country, Cook said.

Cook said they are taking several measures to grow the iPhone adoption in the country by making it more affordable through various financing options and trade-ins. The company introduced its online store in India in 2020.

Apple is currently the leader in India's premium smartphone market (above Rs 30,000) and the country's smartphone market in terms of shipment value in Q4 2022, according to the market research firm Counterpoint Research. It clocked record shipments of over 6.5 million in 2022, registering a 16% growth YoY, the firm noted.

"We think the branded store will further strengthen the overall experience of being in an Apple ecosystem. Apple will be able to control end to end user experience and this will further take its brand image to one level up" Tarun Pathak, research director at Counterpoint Research told Moneycontrol.

Mumbai was the second largest city for Apple in India after Delhi, contributing to about 10 percent of the iPhone sales in the country, as per Counterpoint Research's city level tracker, he said.

Navkendar Singh, associate vice president at IDC India, said while Apple has taken time for its retail store foray in India, it makes sense now more than ever. "The premium Indian consumer is maturing and spending more, which makes India the next big growth market in the next decade for Apple – across product and service categories" he said.

Singh said that Apple's differentiated experience through its own stores will attract premium consumers, which will likely boost the company's sales in the country.

India a key manufacturing hub

India is also becoming a key manufacturing hub for Apple as it looks to diversify its manufacturing capabilities beyond China. The company is currently making iPhones in India through contract manufacturers such as Foxconn, Wistron and Pegatron, with plans to make other products such as its wireless headphones Airpods in the country.

Apple captured 25 percent of 'Made in India' smartphone shipments in terms of value in 2022, as compared to 12 percent in 2021, as per Counterpoint Research. The company's ‘Made in India’ shipments grew by 65 percent year-on-year (YoY) by volume and 162 percent YoY by value in 2022, it said.

Apple’s partners Foxconn and Wistron were the fastest growing manufacturers among the top 10 in Q4 2022, fuelled by increasing exports from Apple, the report added.

In January 2023, India's Commerce and Industry Minister Piyush Goyal said that Apple already has about "5-7 percent of its global manufacturing in India and is targeting to go up to 25% of global manufacturing from India with the most recent models of the iPhone being launched in India."