The Mumbai Apple Store Shows India’s Growing Importance to the Company

Apple is gearing up to open a duo of physical retail stores in India this week and it’s another sign of the South Asian nation’s growing importance to the tech giant. CEO Tim Cook is expected to preside over Apple’s inaugural retail store opening in the country’s financial capital Mumbai on Tuesday. A second location in the Indian capital of New Delhi opens on April 20. Cook has previously spoken about Apple’s view of India, saying he’s a “huge believer” in the opportunities the country presents.

The opening of Apple’s first brick-and-mortar store in India is part of the company’s broader retail push into the country, where its market share is relatively small compared to the country’s size. Around 620 million of India’s approximately 1.4 billion people own a smartphone, making the country one of the largest phone markets in the world, as well as one of the biggest opportunities for growth, according to Counterpoint Research Director Tarun Pathak.

“Apple has an opportunity to target tens of millions of smartphones in sales every year from 6 million units currently,” Pathak told CNET. “Comparatively, Apple sells more than 50 million units annually in markets such as China and USA each.”

Hello, Mumbai

Apple previewed its Mumbai store location this week ahead of the official opening. The flagship store, known as BKC Apple, is a 22,000-square-foot space in an upscale shopping mall at the Bandra Kurla Complex. The store’s design is inspired by Mumbai’s iconic kaali peeli (black and white) taxis and is among Apple’s most sustainable locations, the company says. It’s spread over two levels, along with a tree-lined ground level that features Apple’s signature products.

“At Apple, our customers are at the center of everything we do, and our teams are excited to celebrate this wonderful moment with them as we open our first retail store in India,” said Deirdre O’ Brien, Apple’s senior vice president of retail. 

Prior to this, shoppers in India were limited to purchasing Apple products from “Apple Premium Resellers” or third-party retailers, which had to acquire a license from Apple to sell devices. Customers also shop at Apple’s official online store, which opened in September 2020. 

“Indian consumers have been buying their iPhones from various retail and eTail outlets, and will probably continue to do so, but an Apple Store in two of its biggest cities in India will also give the customers a chance to experience the Apple brand, and not just the products.” Kiranjeet Kaur, associate research director at IDC, told CNET in an email. 

“Buying a premium phone requires more touch and feel, and consumers prefer to buy expensive phones from locations they can trust,” said Neil Shah, vice president of research and Counterpoint. “Until now, Apple had different franchises which may or may not offer the same high touch service, buying and post-purchase experience.”

Made in India

The twin retail stores open their doors as Apple increasingly looks beyond China as a manufacturing base to countries such as India. Last year, Foxconn, one of Apple’s top iPhone suppliers, was forced to temporarily halt operations at its main iPhone City complex in Zhengzhou, China, following a citywide lockdown due to a COVID-19 outbreak. 

Ming-Chi Kuo, a long-time Apple analyst, wrote in a post on Twitter that more than 10% of global iPhone production capacity was affected by the situation at the Zhengzhou campus. Foxconn makes an estimated 70% of Apple’s iPhones, according to Reuters.

At the same time, India has doled out incentives to boost local manufacturing. According to an April report by Bloomberg, Apple tripled iPhone production in India to the tune of $7 billion in 2022, accounting for 7% of total iPhone production. That’s a jump from 1% in 2021. This growth is a result of partnerships with Taiwanese suppliers Foxconn and Pegatron.

“For consumers outside India, the benefits to a diversified supply chain are relatively opaque until there’s a supply chain shock — a political, pandemic, or disruptive weather event,” said Avi Greengart, analyst at Techsponential. “Even then they won’t notice that there’s a problem — and that’s the point. Instead of dealing with shipping delays, limited variety, higher prices, or all three, they will be able to shop as usual and buy the iPhone that they want.”

Apple still relies heavily on China for the majority of its iPhone production, but Pegatron is reportedly planning to boost production in India, as it eyes opening a second factory in the region. Foxconn, meanwhile, reportedly plans to invest about $700 million in a plant in a southern state to make phone components and possibly iPhones. Analysts say Apple could begin manufacturing the next-generation iPhone in India.

“I won’t be surprised if Apple does [manufacture the iPhone 15 in India]. Apple had started manufacturing iPhone 14 models (except the Pro series) in India soon after launch and was exporting these models to markets such as the US, Europe and the Middle East,” Kaur said. “India currently accounts for a very small share of iPhone manufacturing (<5%) but we expect this to grow not just to account for local consumption but also exports.” 

Apple already manufactures the iPhone 14 in India, which is assembled at a Foxconn factory in the outskirts of the southern city of Chennai. The tech giant has been making iPhones in India since 2017, but those tend to be older models.

For all the promise India holds, it doesn’t come without difficulties. The South Asian country isn’t known for its ease of doing business, with a well-documented penchant for red tape and sudden changes in regulations. Apple may also have to pony up high import duties for components, among other supplies it needs.

Nonetheless, the lure of India proves strong. The India Apple stores were rumored to open as far back as 2021 before being postponed to this year. Apple opened its first store in Asia in Tokyo in 2003. 

“India’s 620 million smartphone users are buying their third or fourth smartphones,” Shah said. “As a result, considering growing dependence on smartphones for everything, people are opting for better and more expensive phones.”