Tim Cook Confident Indian Middle Class Will Drive Apple Growth

Breaking his silence on Apple'south India presence, CEO Tim Melt admitted last calendar week that his business concern was flat in the country in the fourth quarter amid weak currency trends. Melt, however, stressed he is still a large believer in the Indian middle grade.

Essentially cost-witting, India, with 450 million users, is the fastest-growing smartphone market place, just after China and the U.s.a., and has the potential to go on growing in double digits in the next couple of years.

According to industry analysts, Melt is aware of the immense potential in the country and would fully employ the aspirational value of the brand every bit saturation sets in the remainder of the smartphone economies.

That day appears not as well far when Apple, with its deep pockets, volition unleash its energies as its own stores go far and the company starts manufacturing new iPhones locally. Cook'south optimism is underlined by the fact that Apple's share in the premium segment is dipping as new players like Communist china'south OnePlus appear on the scene in a market where Republic of korea'south Samsung had reigned supreme.

At tertiary identify, Apple had 25 percent market place share in the third quarter (catastrophe September 30) every bit it launched flagship iPhone XS and XS Max in Bharat. According to Counterpoint Research, the new devices are unlikely to offset the loftier import duty owing to the absence of local manufacturing every bit this made new iPhones expensive as compared to their pricing in other key countries.

"2018 is all prepare to be the first year for Apple tree in India when they will go through their get-go always annual decline in India in terms of volume. We expect iPhone sales to be between 2-2.5 million as compared to more three 1000000 last twelvemonth," Tarun Pathak, Associate Director at Counterpoint, told IANS.

There are multiple factors for this. "Offset, the yr started for Apple with multiple duty hikes on imported handsets. This led to an increase in iPhones prices as Apple is yet to assemble locally, disallowment a couple of models where volume contribution is low," Pathak explained. Additionally, said Pathak, Apple tree has streamlined its channel strategy in a bid to offering more stable pricing which had some short-term implications only can turn out positive for the long term.

Cook expects that at some point, the Indian government will allow Apple to bring its stores into the state. According to Pathak, Apple tree's strategy of bringing in their ain stores has been delayed."It means Apple tree needs to put in extra efforts to unleash more potential out of the India marketplace and this is likely to happen. One time price stability comes in, a lot of things volition eventually get-go settling in," Pathak told IANS.

According to experts, Bharat has a large untapped user base in Tier II and Tier III cities and beyond, and Cook is aware of the tremendous growth opportunity there. According to Upasana Joshi, Associate Research Manager, Client Devices, IDC India, the older models take done meliorate for Apple in Republic of india than the contempo launches, owing to price cuts and discounts offered on them, thus driving affordability.

"With the alter in strategy for Bharat marketplace by focusing more on current line-upward of models and phasing out the previous ones, it will further reduce the volumes for the brand as the larger proportion of its sales would move to high end," Joshi told IANS.

Currently, said Joshi, it is important for whatsoever smartphone brand to plant surface-mountain engineering (SMT) blazon manufacturing facility to reduce the touch on of duty hikes on imports and sustain with currency fluctuation which, according to Cook, are just "speed bumps". SMT is a method for producing electronic circuits in which the components are mounted or placed straight onto the surface of printed circuit boards (PCBs).

"This is true peculiarly for brands similar Apple which accept lower volume base as compared to Xiaomi, Samsung, Vivo, and OPPO who take gear up such facilities locally. Also, the introduction of a mid-end device or re-focusing on selling older models might assistance Apple regain its lost share in India in the coming quarters," Joshi noted.

Apple is an aspirational brand and usually bought by those who have loftier spending ability or can compromise on older generation phones for affordability.

"If Apple aims to target the Indian middle class, it will have to launch products which are a chip more pocket-friendly where consumers can nevertheless feel a sense of the pride for ownership as they currently do with cheaper iPhones," said Joshi.

Cook said that he is "a big believer in Republic of india, very bullish on the country and the people and our ability to do well there". The Apple principal may be looking to realign its India policies next year, creating an ecosystem for the large middle class which is inundated with cheaper Chinese premium smartphones and won't mind spending some more for Apple devices produced locally.