For years, Apple has maintained its status as a premium brand, with products often priced higher than competitors. Even during Steve Jobs’ tenure, the company’s pricing strategy drew criticism, yet Apple remained focused on delivering unmatched brand value and an integrated iOS ecosystem. Many consumers globally found Apple products beyond their reach, but the narrative is changing.
As we step into 2024, one question looms large: Can any global brand afford to overlook the burgeoning Indian market? The answer is clear – no.
India, despite its reputation as a price-sensitive market, has transformed into the world’s fastest-growing economy in various sectors, including smartphones, electric vehicles, social media, and fintech. Global companies are investing heavily in the country in a bid to capitalise on the untapped market and growing consumer demand fueled by increasing purchasing power. Apple is no exception.
Apple has clearly recognised this massive opportunity to boost its sales and revenue, with India emerging as a cornerstone of its global strategy. All of its recent moves point to one conclusion: Apple is betting big on India.
By tapping into India’s vast consumer base and leveraging its young, tech-savvy population, Apple aims to solidify its position as a leading player in the Indian smartphone market.
A New Retail Expansion
The skyrocketing demand for iPhones in India has prompted Apple to announce plans for four additional retail stores across the country. Following the successful launches in Delhi and Mumbai in April 2023, Apple is now turning its attention to Bengaluru, Pune, and the Delhi-NCR region, with the possibility of adding another outlet in Mumbai.
What’s more interesting is that Apple’s ambitions don’t stop at retail expansion. The tech giant has confirmed plans to manufacture the entire iPhone 16 lineup in India, including the high-end Pro and Pro Max models.
Apple’s decision to manufacture iPhone Pro models in India reflects the ongoing trend toward “premiumization,” where an increasing number of consumers are opting for high-end products. Additionally, e-commerce platforms are amplifying this shift by offering jaw-dropping discounts and EMI options, making luxury purchases more accessible.
Apple’s retail expansion in India is also a strategic response to the impressive sales contributions from its Delhi and Mumbai outlets.
According to Navkendar Singh, Associate Vice President of IDC India, these two cities alone contributed over one-fifth of Apple’s business, indicating the need for multiple stores in these major metros. By broadening its retail footprint, Apple is not just responding to demand; it’s strategically reinforcing its position in the premium device market in India.
It is important to note that even though iPhones are not fully manufactured in India, with most being primarily assembled in the country, Apple is taking gradual steps to reduce its dependency on China. This is still a huge win for both Apple and India.
Apple has already started manufacturing the iPhone 16 Pro and iPhone 16 Pro Max in India through its contract manufacturing partners, Foxconn and Pegatron.
Reports indicate that Foxconn is handling the production of the iPhone 16, 16 Plus, and Pro Max models, while Pegatron focuses on the iPhone 16, 16 Plus, and 16 Pro models. Additionally, Tata Electronics is responsible for manufacturing the iPhone 16 base model.
However, this isn’t Apple’s first venture into manufacturing iPhones in India. The company began its journey in the Indian market in 2017 and has since expanded its operations to include older-generation iPhones. This includes popular models like iPhone 15, iPhone 15 Plus, iPhone 14, iPhone 14 Plus, and iPhone 13.
Apple Growth in India
India’s appetite for iPhones shows no signs of slowing. The demand for iPhones in India has reached new heights each year, reflecting the country’s growing consumer base and purchasing power.
As a result, in CY 2023, iPhone shipments in India surged an impressive 39% YoY to 9.2 million units, while the revenue increased an impressive 42% YoY in 2023 to $8.7 billion. This year, the shipment figure is estimated to grow to over 13 million units.
According to the Economic Survey 2023-2024, Apple manufactured/assembled an impressive $14 billion worth of iPhones in India in FY24, constituting 14% of its global iPhone production.
The Indian government’s Production Linked Incentive (PLI) scheme has played a crucial role in Apple’s efforts to build a robust local ecosystem. Interestingly, iPhone exports from India increased an eye-popping 93% YoY to $12.1 billion in FY24, ending March 31, 2024. This figure accounted for 65% of the country’s total mobile phone exports and 35% of its total electronics exports.
What’s even more noteworthy is that in just the first five months of FY25, Apple’s iPhone exports from India have already reached $5 billion, marking a 54% YoY increase. This rapid growth illustrates India’s increasing significance as a key player in Apple’s global supply chain. By producing more models locally, Apple can potentially reduce costs associated with imports and tariffs, making its products more competitively priced for Indian consumers. Moreover, local assembly can lead to shorter lead times, ensuring that new products reach the market more quickly.
Apple Targeting Android Smartphone Users
Apple’s growing presence in India is emerging as a direct threat to Android’s market dominance. The recent price drop of the latest iPhone 16 Pro models, a historic move, is strategically designed to attract a larger pool of Android smartphone users in the country.
According to IDC, iPhone sales in India grew an impressive 24.2% YoY in Q2 2024, increasing Apple’s market share to 6.7%, up from 5.6% in Q2 2023.
In the premium segment (priced between $600 and $800), Apple is giving stiff competition to Samsung, with a commanding market share of 61%. In contrast, Samsung’s market share stood at 24% as of Q2 2024. The super-premium segment (priced above $800) tells a similarly compelling story, where Apple dominates with an astonishing 83% market share compared to Samsung’s mere 16%.
The above figures highlight Apple’s leadership in driving the premiumization trend in India’s smartphone market, putting significant pressure on Samsung and other Android OEMs. As consumer preferences shift towards higher-quality devices, more and more Android users are jumping ship to Apple iPhones.
The Road Ahead
Looking ahead, Apple has set ambitious targets for itself in India. The tech giant aims to manufacture 25% of all its iPhones in India over the next 3 to 4 years.
India’s government is also actively encouraging Apple to localise the production of its entire product lineup, including AirPods, MacBooks, and iMacs, in the coming years. States like Karnataka and Tamil Nadu are leaving no stone unturned to attract Apple’s future investments by positioning themselves as the next hubs for local tech manufacturing.
As Apple continues to strengthen its foothold in India, it opens doors for job creation, skills development, and further investment in the local economy. This partnership between a global tech leader and the Indian market reflects a broader trend where international companies are increasingly recognizing the potential of India as a hub for technology and innovation.
