For Apple, I for India!

In the last week, we were all witness to an overdose of coverage related to the India visit of Apple’s CEO, Tim Cook. In a well-choreographed PR exercise, Cook gave a lot of photo-ops to the media, made all the right noises, tasted some local food, met with key people from industrialists to film stars to politicians and even watched an IPL match – ample proof that he and his handlers had done a thorough job of appealing to all the Indian senses. For Americans, marketing comes very naturally. And in American companies, their CEOs are their best salesperson. So, during his visit, Cook did not waste a single opportunity to soft sell Apple’s products in some form or other. It seemed as if India was the apple of the eye for Cook.

And what was he here for basically? Cook was here among other things to open Apple’s first direct showroom in India. Why is it such a big deal? Apple showrooms are there all over the world. Does a global CEO go all the way from her base country to open showrooms in other countries? Well, it doesn’t happen usually unless otherwise, she wants to turn such an opportunity to convey a larger strategic intent to the stakeholders at large – shareholders, employees, vendors, competitors, local governments and of course consumers. I am sure that’s what Cook intended too during his India visit just like Jesper Brodin, CEO of IKEA when IKEA opened its first showroom in India in 2018.
Even Cook would have been pleasantly surprised to see and hear of the massive lines in front of Apple’s showrooms in Mumbai and Delhi even before they were officially opened. What explains this kind of craze for a product like the iPhone that caters to just 11% of the total market in India? It is the same in India as in other countries. The answer actually lies in the answer to another question – Who is the brand ambassador for iPhone or for that matter any Apple product?
Vivo phone has Virat Kohli as its brand ambassador. Alia Bhat is the brand ambassador for the Galaxy range of Samsung phones. Similarly, other brands have other celebrities. But not the iPhone. For Apple’s products, its numerous users are its brand ambassadors. I remember vividly back in 2007, even before the first model of the iPhone was officially launched in India, people returning from the US were going gaga about it. Even when Apple was not even looking at India as a serious market and was more concerned about China, it had its fan following in India. It is this fan following borne by the aspirational nature of Apple’s products that explains the huge lines in front of Apple’s showrooms. In today’s viral age, for a marketer, this is the ultimate endgame when her consumers become the best brand ambassadors. Just like the line between the brand and the product category blurring completely.
Those who have visited Apple’s showrooms would vouch for the fact that they are not just platforms for showcasing Apple’s products. Apple’s showrooms typically showcase the Apple experience. When I visited Apple’s showrooms in Tokyo and Singapore I was floored by its simplicity and single-minded focus in presenting the Apple experience. There was no one in the showroom to “push” a product to you!
After many years, it is now that India has become very important to Apple. As we speak, India has almost a 360o engagement with Apple. For quite a while now, like other tech companies, India has been a critical source of engineering manpower for Apple. Companies in India have been providing backend support for Apple’s marketing programs as well. As a country, India is now among the high-growth market for Apple’s products. And now, India has also emerged as a manufacturing base for Apple’s products.
Among all the above engagements, though for India as a country, we would look at the last one as the most important, from Apple’s perspective it is India as a consumer market that matters. In the luxury or the premium end of the smartphone market, Apple is the leader with a staggering 50% share for the Oct/Nov/Dec quarter of 2022 and a 45% share for the full year of 2022. Yet, internally to his team, Cook, like most CEOs might say that they are just scratching the surface and here’s why.
If you look at the whole smartphone market, Apple’s iPhone has just a market share of close to 8% and is behind Samsung which leads the pack with a 20% share, followed by Chinese brands like Vivo, Xiaomi, Oppo and Realme. For the whole year of 2022, Apple’s share is less than 5%. The premium market where Apple’s iPhone is playing is just 11% of the total market.
Now compare this to the situation in its home turf, America. There, Apple dominates the market with a 57% market share. However, the market is expected to grow just at a CAGR of 0.29% for the 2023-28 period. In a market where it is already a dominant player with more than half the market share, the possibility is only for dropping share and not gaining. Growth for Apple can come only from markets where the markets are expected to expand and where Apple has a low market share. India fits this definition perfectly at this point in time.
For India, the smartphone market in absolute numbers is expected to reach a staggering 253.28mn units by 2027 with a CAGR of close to 8% for the period 2021-27 as per available research reports. Now this is a mouth-watering opportunity for the CEO of any smartphone manufacturer including Tim Cook. And when the market share is as low as 5%, it is an opportunity as much a challenge.
India is a mass market where the volumes are there in the low, utility end. The moot question is, – Will the recent strategic initiatives of Apple like producing in India and opening up a direct retail presence help increase sales? Unlikely. But both help to contribute to Apple’s strategic plans in different ways. Increasing production volumes in India helps to reduce over-dependence on China. It helps to reduce production costs by taking advantage of the inverted duty structure of manufactured phones Vs imported ones. The showrooms of course act as a reminder medium for the brand Apple.
My sense is that while Apple is not the one to cut prices to increase its share, soon it may come up with an emerging market iPhone that is competitively priced to increase its share. This may not happen today or tomorrow but can happen when Apple is faced with a situation of stagnating volumes from developed markets in the coming years. The journey of Apple bringing an emerging market model and Indian consumer’s per capita income increase may meet midway within the next ten years.
On the one hand, increasing the production share out of India and increasing the domestic market share in India on the other hand, means India would be in the thick of the action as far as Apple HQ is concerned for the next few years. As kids in kindergarten schools, our English learning started with “A for Apple”. For Tim Cook and his team at Apple, it is “I for India”!

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