Apple’s ambitious push for double-digit market share in India

Factors driving Apple's momentum include expanding coverage, innovative financing solutions, localised marketing efforts, and growing enterprise adoption

March 20, 2024

The tech giant offers finance options and additional incentives like increased margins and freebies to retailers, fueling sales efforts

Intensified focus on India comes amidst a slowdown in key markets like the US and China, with India emerging as Apple's second-largest manufacturing hub

While a significant portion of iPhones manufactured in India are exported, the domestic market shows sharp growth, exceeding 38% annually

Apple maintains a dominant position in the premium segment, capturing a 64% share in the INR 45,000 and above price range

Apple is ramping up efforts to secure a double-digit market share in India’s smartphone arena, aiming to surpass its current 7% foothold. The tech giant has broadened its reach by partnering with numerous authorised resellers nationwide, including prominent retail outlets like Croma and Reliance Retail.

Previously hesitant to feature in smaller retail venues, Apple has shifted its approach. The company also facilitates finance options for retailers with minimal sales. Moreover, additional incentives such as increased margins and freebies are offered to retailers who meet sales targets.

According to experts, Apple’s prominent presence in the Indian market over the past year is evident through vigorous marketing campaigns, new Apple stores, distribution expansions, and attractive channel earning structures.

Amidst challenges in key markets like the US and China, Apple has intensified its focus on India, the world’s second-largest smartphone market. This strategic emphasis coincides with India’s emergence as Apple’s second-largest manufacturing hub after China. In 2023, Apple’s smartphone production in India amounted to INR one lakh crore, fueled by the production-linked incentive (PLI) scheme.

Although many iPhones manufactured in India are exported, the domestic market is experiencing robust growth, surpassing 38% annually. Tim Cook, Apple’s CEO, has lauded India as an “incredibly exciting market,” with the company achieving record revenue.

Experts also highlight Apple’s effective strategy of offering moderate margins and incentives to channel partners. This approach contrasts with competitors who offer higher margins on low-cost devices. Industry insiders reveal that Apple typically offers premium resellers a 10% margin, large-format retailers receive 8%, and other distributors secure 6-8%. Meanwhile, rival Samsung typically offers margins ranging from 8-10%, with Chinese players often providing over 10%. In India, where mobile adoption is rapidly growing among the young and burgeoning middle class, Apple is the go-to brand for aspirational consumers.

To reach new consumers in smaller towns and cities, Apple is expanding its exclusive outlets, offering special deals with online retailers, especially during festive seasons, and implementing attractive channel support schemes for multi-brand outlets (MBOs) and large-format retail (LFR) chains like Croma and Reliance Retail.

Despite ranking sixth in India’s smartphone market in 2023, with shipments exceeding 10 million units and a nearly 7% market share, Apple remains a revenue leader alongside Samsung. The premium segment, where Apple dominates with a 64% share in the INR 45,000 and above price range, has seen significant growth, indicating a trend towards premiumisation in the market.

Analysts attribute Apple’s momentum to its expanding coverage, innovative financing solutions, focus on customer experience, growing ecosystem appeal, localised marketing efforts, and increasing enterprise adoption.

Singh notes that besides encouraging annual upgrades to new iPhone models, Apple is making previous-generation iPhones more accessible through financing offers. Apple’s strong performance in the ultra-premium segment, priced at $800 and above, has contributed to its overall success in India’s smartphone market.

Source: Economic Times

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