Business Case Study: Apple India: A Case Study of Growth Story

In 3^rd Week of April 2023, Apple, Inc. entered into India with direct presence by opening couple of physical stores; one in Mumbai and another one in New Delhi. Earlier in 2020, Apple has opened its Online Store in India. Apple has got ambitious plans for India. The triggers behind this are the growing middle class in the country, growing economy, mobile penetration rate, and raising income levels in the country. This specific case study describes the Apple’s strategy for India and its growth plans.

Organizational Revenues: In FY2022, Apple India has reported $4 billion revenue; and its revenue has gone up to $6 billion by FY2023. IT is a 45% growth of revenue in one year.

Growth Strategies: In line with government’s “Make in India”, Apple is manufacturing its phones in India by partnering with three different companies such as Foxconn, Wistron, and Pegatron. Foxconn, it’s manufacturing partner is investing $700 million in setting up of iPhone manufacturing unit in Bangalore. Another Opportunity for Apple is Android as Mobile Phone Operating System has got 95% market share in India. Because Apple is also making their phones based on Android operating system, there is a huge market to grab for Apple India. Another thing is majority of Apple India first time customers are brand switchers. They want to go for another innovative brand; hence they are moving to Apple.

As on April 2023, Average smart phone sold cost is $224 in India; Apple’s starting model iPhone SE price is also $429. This reducing gap between average smartphone price in India and Apple starting model price is also another opportunity of growth for Apple India. As on April 2023, Apple would make India as its alternative export and manufacturing hub for its products. India is a major growth opportunity for Apple because India is the world’s 2^nd largest smart phone market.

Apple Products for India: In India, Apple would be selling products such as iPhones, MacBooks, iPads, Wearable devices; for iPhone 14, and iPhone 14 Plus it has launched different colour options from its newly opened Indian retail outlets. As part of this initiative, Apple has recruited more than 100 engineers, and MBAs as their workforce in India.

In 2020 itself, Apple has launched HomePod for first time in India, for lesser price than US. Also, it launched smart speakers in 2020 in Indian market. Originally Apple products have entered into country two decades ago through abroad visitors or through importers. From 2020, Apple was trying to have local direct presence by first setting up of an online stone in 2020; and then in 2022, by opening two direct retail outlets in India.

Other Apple Initiatives: As part of its growth strategy, in 2023, Apple was reorganizing its leadership structure in India, not only in marketing and sales side, but also in product manufacturing and development areas. Apple also wants to expand exports from India by scaling up its manufacturing partners such as Foxconn, Pegatron and Wistron.

What Helped Apple?: Following Factors helped Apple’s growth in Indian sub-continent:

1. Product Finishing, Innovating Designs, the Look and Feel, Screen Quality are the Major distinctions for Apple to compare with its competitors.
2. Another move that helped Apple is, Identification of growth of Google’s Android Operating System; and then adopting it to Apple’s Phones; instead of strictly enforcing of its own iOS operating system.
3. Apple Partnering with Foxconn, Wistron, and Pegatron for manufacturing and exporting in Asian region.
4. Fourth factor that helped Apple in India, is Government’s Production Linked Incentives (PLI) such as Protecting Competition, Inviting Investments, Integrating India with Global Supply-Chains, and Reducing Import norms.

In 3^rd week of April 2023, Apple CEO Tim Cook said, “India has such as a beautiful culture and an incredible energy, and we’re excited to build on our long-standing history”.

Apple India with its new direct sales stores, wants to be closer to Indian consumer market, with more energy, innovative products and ample opportunity. Hope reducing gap between average smart phone price in India and Apple’s entry level phones prices helps Apple to gain more market in India and be part of the growing economy.

                                                                                                                       Thank You.

                                                                                                                         Best Regards,

                                                                                                                         Dr.Goparaju Purna Sudhakar

                                                                                                                           (https://gpsudhakar.com)

References:

1. Leswing, K. (2023), “Why India is So Important to Apple”, CNBC, April 19, 2023.
2. Gupta, S.D. (2023), “Roller-Coaster Ride: How Apple’s India Strategy Finally Bore Fruit”, Business Standard, April 12, 2023.
3. Singh, s. (2023), “The Time’s Ripe and Apple is Ready: Decoding The iPhone Maker’s India Strategy Shift”, The Economic Times, April 21, 2023.
4. D’Cruze, D.C. (2023), “Apple Refocuses on India, Overhaul’s Management to Increase Sales of iPhones, iPads, and Other Products”, Business Today, March 09, 2023.
5. ToI (2023), “This is First Apple Product to Launch in India at Cheaper Price Than the US”, Times of India, January 30, 2020.
6. ANI (2023), “First Apple Retail Stores to Open in India Next Week”, ANI News, April 11, 2023.
7. Kharpal, A. (2023), “Apple Opens its First Store in India as it Looks for a New Generation of iPhone Users”, CNBC, April 18, 2023.