![Apple iPhones India](https://img.etimg.com/thumb/msid-108627185,width-300,height-225,imgsize-80144,resizemode-75/apple-iphones-india.jpg)
Retailers ET spoke to said Apple was earlier hesitant to get displayed in small retail outlets, but that has changed now. The company is also helping with finance options, even for retailers doing very small volumes. Further, additional incentives are being given to retailers for meeting targeted sales like increased margins, freebies etc.
“Apple has been very noticeable in the India market for the past year or so with its high decibel marketing, opening of new Apple stores, distribution expansion and favourable channel earning structure,” Navkendar Singh, associate vice president with IDC India, told ET.
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Apple has been doubling down on India—the world’s second largest smartphone market—particularly due to geopolitical conditions with the Cupertino-based company also witnessing a slowdown or stagnation in key markets of the US and China. The retail push comes on the back of India emerging as Apple’s second largest manufacturing hub after China. The US major produced smartphones worth Rs 1 lakh crore in 2023, on the back of the smartphone production-linked incentive (PLI) scheme.
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While a majority of iPhones manufactured in India are exported, the domestic market too is growing sharply for Apple—at over 38% on year. Apple chief executive Tim Cook has previously described India as an “incredibly exciting market” with the company achieving record revenue.
“Apple has set a standard with perfect push and pull (brand equity and marketing) strategy and how much margins or incentive it offers for its channel partners to make the sale effortless and still earn 4-6% on an expensive premium device versus 6-10% on a low-cost sub $200 device,” Neil Shah, vice president of Counterpoint Research, told ET.
As per industry executives, typically, Apple offers 10% margins to its premium resellers, 8% to LFRs and 6-8% to other distributors while the small, authorised retailers get around 4-6%. Rival Samsung typically offers 8-10% margins, depending on the models while Chinese players offer upwards of 10%.
“In a ‘mobile first’ country like India, the young and growing middle-class consumers are looking to purchase their second or third smartphones, Apple is the North Star,” Shah said.
As per IDC’s Singh, Apple is trying to attract new aspirational consumers from smaller towns/cities by opening more exclusive outlets, special deals with etailers, especially during the festive period, and attractive channel support/schemes to multiple brand outlets and (MBOs) and large format retail (LFR) chains like Croma and Reliance Retail.
A query sent by ET to Apple remained unanswered at the time of going to press.
As per estimates, in 2023, Apple stood at the sixth position in the India smartphone market, with annual shipment of over 10 million and nearly 7% market share. The company is joint leader with Samsung when it comes to entire India smartphone sales revenue despite selling fewer phones than its Korean rival.
“Apple has 64% share in Rs 45,000 and above premium market. The Rs 45,000+ segment where Apple is dominant has now swelled from 3% in 2020 to 11% 2023, showcasing the premiumization trend and how Apple has been able to cash on this and India becoming an important market for Apple,” Shah said.
As per analysts, key levers that have helped Apple’s momentum are rapidly expanding coverage, innovative financing solutions, focus on experience, growing understanding of the benefit of Apple’s ecosystem across products, and localised marketing efforts, as well as growing enterprise customers.
Singh said that in addition to luring upgrades on new iPhone models every year, Apple has focussed on making previous generation iPhones more affordable with financing offers. Additionally, the ultra-premium segment of $800+, share of which rose from a meagre 4% to 7% in 2023, can be attributed to Apple’s strong performance, as its share stood at 68%, shipment growth of 72% in this price segment YoY.
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