The dwindling sale of Apple products in China made Apple CEO Tim Cook launch a mega-hunt for new markets. The needle in his business compass seemingly pointed toward India, a country predicted to have 651 million smartphone users by 2019.
Well, for the Apple boss, the recent whirlwind tour did not quite turn out to be a ‘came-saw-and-conquered’ kind of saga. Even after meeting the Premier of the country, partying hard with Bolly biggies, and praying at a Ganesha temple, Apple CEO Tim Cook has reached nowhere near getting a bite into India’s enormous consumer base.
So where did it go wrong?
To put it in a nutshell, Apple’s business strategy of maintaining complete control of its supply chain is in clash with the government of India’s retail policy, which requires all foreign retail aspirants to procure at least 30 percent of its components locally. “Come and manufacture here” has been the clear and consistent message from the PM.
India’s rigid stand on the 30 percent policy is, according to New York-based media Mughal Bloomberg, a ‘fatal blow’ to the company’s ambitions to set up exclusive Apples Stores across the Indian cities. The California-based smartphone pioneer currently uses multiple avenues, such as online shops and multi-brand brick-and-mortar stores to retail its devices. It is easy to see why the smartphone giant desperately wants to grow beyond this model – all these channels can and do steer customers away from iOS devices to less expensive brands (read Micromax and Samsung). While Apple attained a nearly 56 percent sales growth for its iPhones over the past year, the data from the research firm CounterPoint Technology revealed that Samsung, the smartphone giant from south Korea, sold more phones than Apple in the premium Rs.30,000 plus category in 2015-16.
Not all hopes are lost though – the 30 percent policy can technically be overturned. But the final decision rests with the Indian Prime Minister, who has got the sole authority to relax the 30 percent policy for companies offering products or services based on ‘cutting-edge’ technology. Now the problem is Apple’s technology does not qualify for this exemption. But that is only for the time being – Apple’s future technology Innovations may well make the South Block tweak its policies in favor of Apple. India might not find herself in an ideal win-win position if the finance ministry chooses to deviate from its stringent trade policy, but for Apple, an entry into the Indian market via Apples exclusive stores will be no less than a jackpot.
Time alone can tell whether Apple will be leading the 4G race in the subcontinent in the upcoming years or will it go on playing the second fiddle to Samsung.
Till then, Apple loyalists, wait with your fingers crossed!