The Cupertino smartphone maker’s objective of setting up Apple manufacturing units in India moved forward a few paces as the company’s executives made their case to the Indian government on Wednesday.
Priya Balasubramaniam, one of Apple’s VPs, was part of the team that met with government officials and laid out detailed plans for starting a manufacturing unit in the Indian subcontinent.
The meeting ended inconclusively, and it is expected that a decision will take some time coming, one of the reasons being that deep tariff cuts are being sought for duties payable on imported components.
In a statement following the meeting, Apple said: “We’ve been working hard to develop our operations in India and are proud to deliver the best products and services in the world to our customers here. We appreciate the constructive and open dialogue we’ve had with government about further expanding our local operations.”
Apple’s share of market in the Indian smartphone segment is almost negligible, at 2%. It dropped down from 4% the year before. During the second quarter of 2016, Apple’s total iPhone sales in India stood at 800,000 units in a market that totaled 30.7 million units. Android smartphone market share in India at the time stood at 97%, primarily because of the wide price range of these devices.
For Apple, India still represents a massive market opportunity at a time when its global sales are on the decline. The iPhone 8 (iPhone X?) may still do well enough for the company to get back to device sales growth, but the Cupertino electronics giant is not taking any chances.
The company’s earlier attempt to make India a market for refurbished phones hit a brick wall when the government objected to the move. One of the factors that swung the decision against Apple was that India could become a dumping ground for end-of-life Apple products, leading to a new problem of e-waste disposal.
By setting the ball rolling on its India manufacturing plans, the company is possibly trying to pre-empt another year of device sales decline, similar to what it experienced during the 2016 fiscal.
Within the premium smartphone market, however, Apple is still the king in India with a 66% market share, followed by Samsung at 23% and a surprise wild card, Google, which rapidly gained a 10%+ market share of the premium smartphone segment in India barely a month after it launched Google Pixel in the subcontinent.
Apple now needs to leverage everything it can to make India one of its core markets. There’s still massive untapped potential there, but the iPhone maker needs to find a way to bring down its price point a little, and having a manufacturing unit in India could be just the thing to make that happen.
If the final decision to open Apple manufacturing units in India is in the company’s favor, it could begin to ease the company’s dependence on Chinese manufacturers over time.
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