Apple has finalized a list of locations for its first retail store in India, according to sources who spoke to Bloomberg. The vetted locations are said to include several upscale sites in Mumbai that are comparable to iconic Apple stores on Fifth Avenue in New York, Regent Street in London, or the Champs-Elysees in Paris. A final decision on the plans is expected to come "in the next few weeks," said Bloomberg's sources. In the Indian market, Apple ranks 11th and accounts for just one percent of India's phone sales, selling fewer than one million iPhones during the first half of 2018. Comparatively, rival smartphone maker Xiaomi sold "more than 19 million" during that period, according to data gathered by Counterpoint Research. In an effort to revamp the company's presence in India, Apple CEO Tim Cook is believed to be working behind-the-scenes to "remold Apple's failing India strategy," according to both current and former Apple employees who spoke to Bloomberg. This strategy includes better and longer-lasting retail deals with higher sales targets, the opening of official Apple retail stores in India, "overhauling" the company's relationship with independent retailers, and improving apps and services "aimed more closely at Indians." For retail, the official Apple stores are said to open in 2019 and will eventually include locations in New Delhi, Bengaluru, and Mumbai. While the Indian government's rules for foreign companies opening shops have previously prevented Apple from launching local stores, the company now builds some of its iPhone SE and iPhone 6s models in India, which is believed to help it meet India's rule requiring these companies to manufacture 30 percent of their products locally.<doc-sep>Apple’s elusive India store is back in the news. On May 08, Bloomberg reported that the iPhone-maker has shortlisted a few locations for its first retail store in India. The news comes after CEO Tim Cook, in an April 30 earnings call, said, “We would like to place retail stores there (in India). And we’re working with the government to seek approval to do that. And so, we plan on going in there with sort of all of our might.” According to Bloomberg, the first Indian store will likely open at an upscale site in the commercial hub of Mumbai. That’s on the same lines as Apple’s strategy for stores in other countries. The company boasts of prime real estates, such as Fifth Avenue in New York, Regent Street in London or the Champs-Elysees in Paris. “Apple runs an extensive global network of retail stores and its ability to sell a huge number of iPhones per square-meter of retail space is very impressive,” Neil Mawston, executive director at UK-based Strategy Analytics, told Quartz. “If Apple can build large stores in premium shopping districts, the company will sell a lot more iPhones in India next year.” With retail stores in big cities such as Mumbai, Apple holds the potential to capture over 2% of the world’s second-largest smartphone market by 2020, Mawston estimates. Currently, iPhones account for around 1% of smartphones sold in India. 🔋 Charging up Over three years ago, the Cupertino-based giant kickstarted the process to open stores in India. In May 2016, Cook made his maiden India trip during which he met the Indian prime minister, attended Bollywood parties and cricket matches, and even prayed at a Ganesha temple. The efforts showed results as the next month, Apple secured permission to open stores. However, it never got around to doing so because it didn’t meet a rule requiring retailers to locally source at least 30% of their raw material. Apple currently sells its products in India through third-party retailers such as Maple and Nyasa, or via online portals such as Amazon and Paytm Mall. But things are changing. The manufacturer, which made only the older iPhone SE and 6S models in India, has ramped up local production. Apple started assembling the iPhone 7 at its supplier Wistron’s Bengaluru facility in March. Another supplier, Foxconn, is also expected to begin assembling Apple’s higher-end phones such as iPhone X and iPhone XS in Chennai sometime this year, Fitch Ratings said in a note in January 2019. “Local manufacturing is one area where it can get rid of 20% taxes it was giving and now can pass it on to end users,” Tarun Pathak, associate director at Hong Kong-based Counterpoint Research, told Quartz. “With this, Apple can realign its pricing strategy in India.” Apple’s newest model, iPhone XR, sells at starting price of Rs60,000 ($858)—almost six times the $150 average retail price of a smartphone in India. The company should also “partner with more Indian e-tailers, and try to encourage more subsidies from operator partners such as Jio or Airtel,” Strategy Analytics’ Mawston said. 📱 Recovery mode Apple’s shipments to India have dipped significantly recently, and its market share slipped from 2.4% in 2017 to almost 1% a year later. “The Apple store in India will be an expensive exercise, but it allows Apple to beef up its premium image, and justify the high prices of its devices,” said Rushabh Doshi, research director at Canalys. “If Apple successfully builds hype about its store, smart marketing will propel its growth, boosting sales not just for the company directly via in-store but also for its partners—both online and offline.” 📞 Calling India… The retail push comes at a time when China is no longer as viable a market as it once was. “Apple needs to crack the India market as it is the only country in the world where Apple can attract maximum first time iPhone users, given the under-penetrated smartphone segment, young population, and high aspirational value for iPhones,” Counterpoint’s Pathak said. However, the company faces stiff competition from Chinese rivals such as Xiaomi, Vivo, and OPPO. While Apple is yet to open a single outlet, market leader Xiaomi is eyeing 10,000 stores across the country before the end of this year. Despite the hurdles, Apple is bullish about India. “It’s a long-term play. It’s not something that’s going to be on overnight huge business,” Cook said on the most recent earnings call. “But I think the growth potential is phenomenal.” With Apple taking charge of the end-user experience while making a purchase, it could effectively push MacBooks and iPads as well as services—one of its most lucrative revenue streams in the world, which Indians are slowly warming up to.<doc-sep>Congratulations Apple fans, you're about to get the first official Apple store in India. Reports indicate the company has finalised a short list of locations where the store may open up. And good news for Mumbaikars, it's going to be somewhere in your city. Images courtesy: Reuters The iPhone maker has reportedly picked a few upscale sites in Mumbai, and plans to reveal its decision within the next few weeks. Supposedly, the locations are equivalent to Apple's stores on Fifth Avenue in New York, Regent Street in London or the Champs-Elysees in Paris. Basically, it might be the classiest store India has ever seen. Apple had so far been blocked from opening a local store, given that it doesn't source products locally. However, given that the company is shifting a lot of its manufacturing to India for the local market, they're currently in talks with the government to discuss setting up shop here. It's all part of Apple's push to increase its slice of the smartphone market share in India, now that its sales have been stagnating in its other biggest markets, China and the US. Of course, in India they'll still be competing against the likes of Xiaomi, OnePlus, Huawei, and more. Apple's Fifth Avenue store More importantly, aside from opening up a storefront in Mumbai, manufacturing locally will allow them to avoid the 20 percent tariff on imported phones, allowing them to price them cheaper. "India is a very important market in the long term," Cook said while reporting the company's earnings last week. "It's a challenging market in the short term, but we're learning a lot. We plan on going in there with sort of all of our might."<doc-sep>
NEW DELHI: Apple Inc has finalised a short list of locations for its first retail store in India, according to people familiar with the plans, as the company redoubles its efforts in the world’s fastest-growing smartphone market.The iPhone giant has zeroed in on several upscale sites in Mumbai, and plans to make a final decision in the next few weeks, said the people, asking not to be named because the discussions are private. The vetted spots are comparable to iconic Apple locations on Fifth Avenue in New York, Regent Street in London or the Champs-Elysees in Paris, they said. Apple has been prohibited from opening its own stores in the country because it doesn’t meet local sourcing requirements, but it’s shifting manufacturing into India and is in talks with the government about its retail expansion.The Cupertino, California-based company has struggled to establish itself in India where consumers have opted for less expensive Chinese brands such as Xiaomi and Vivo. But chief executive officer Tim Cook has vowed to improve in the fast-growing market, especially as Apple loses ground in China. Manufacturing in India will also allow the company to sidestep 20 per cent tariffs on imported phones, making its devices more competitive.“India is a very important market in the long term,” Cook said after the company’s earnings report last week. “It’s a challenging market in the short term, but we’re learning a lot. We plan on going in there with sort of all of our might.”Apple doesn’t break out its revenue from India since it’s such a minor part of the business. In the most recent quarter, the company generated 44 per cent of revenue from the Americas and 18 per cent from greater China. India is lumped in with the rest of Asia-Pacific, which altogether account for about 6 per cent..Apple has tried in recent years to gain ground as India eclipsed China as the fastest-growing smartphone market in the world. One Apple veteran took over as country chief at the end of 2017, overhauling its strategy and replacing top sales executives. But with little sign of progress, a new country chief was named in November.Still, Apple continues to flounder in India. Research firm Canalys estimates the company’s shipments fell by more than 75 per cent in the first quarter of 2019, giving it only about 1 per cent of the country’s smartphone market.Now Apple appears to be doing the difficult -- and expensive -- work of building a foundation for its business. Foxconn Technology Group, its most important manufacturing partner, is running quality tests for the iPhone Xr series in India and plans to begin mass production at a facility in the suburbs of Chennai. Older models are already assembled at a Wistron plant in Bangalore. The increase in local operations should expedite approval for a company-owned store when a new government takes over in India at the end of May or early June, said the people.“Its own retail store might be just what Apple requires to reinforce its premium image,” said Rushabh Doshi, an analyst with Canalys. “A store just before the next launch will be the perfect timing for Apple to restart its Indian growth story.”It’s clear Cook won’t give up against Chinese phonemakers that have come to lead the market. “We have made some adjustments in India and we’ve seen preliminarily some better results there,” he said last week during the earnings call.Indeed, last month Apple ran front-page newspaper ads announcing sizable discounts on the latest iPhone XR. The phonemaker, which rarely slashes price on its latest models, has offered a markdown of Rs 17,000 ($244) on its latest iPhone XR, bringing the price down to Rs 59,900. This week online retailer Paytm Mall announced cash paybacks on a variety of iPhone models.“The price cuts are definitely a step in the right direction,” said Doshi. “Apple has a delicate balance to maintain: It needs to appeal to the cost-conscious Indian buyers, while ensuring that price drops do not dilute its premium image.”