As sales of Apple's flagship iPhone slow globally, the company's bullishness that India will emerge as a major driver of it volumes is causing acceleration in its investments in India.
In the last quarter alone, Apple's iOS app accelerator, as well as its manufacturing unit run by contract manufacturer Wistron in Bengaluru, went online. These investments are in addition to the company's overall investment in growing its sales channel and marketing more to consumers in India.
Apple's game plan is to turn India into the next China for the company, not only in terms of sales but also manufacturing and exports. The company has been engaged with the Narendra Modi government to receive sops for setting up full-fledged manufacturing and not just iPhone assembly for over a year now.
"We began to produce the iPhone SE there during the quarter, and we're really happy with how that's going. And so we're bringing all of our energies to bear there. I see a lot of similarities to where China was several years ago," Business Standard quoted Apple CEO Tim Cook in a call with investors on Tuesday.
While sales of the iPhone have been growing by leaps and bound in India, analysts said the growth Apple is seeing is nothing out of the ordinary. With just two-three percent market share in India's overall smartphone market, Apple still has a long way to go, especially in convincing Indians to switch to Apple premium category phone.
However, everyone seems to agree with Cook's reading that the India market will provide a significant opportunity for Apple to sell millions of its high-end devices.
Apple has for long maintained that as network infrastructure in India gets better, more customers will begin to see the benefits of owning an iPhone. This combined with a young population that is aspirational by nature is what could turn India into Apple's next China.
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Last month, Chinese smartphone maker Huawei had announced that it had overtaken Apple in global sales volume to become the second largest handset company.
"Huawei overtook Apple in global sales volume share in December," Huawei India Director for Product Centre Allen Wang said. He said the company's share in December 2016 reached 13.2 percent globally whereas Apple was in the range of 12 percent. The company claims to have shipped 139 million smartphones last year.
