Apple for a decade has relied solely on third parties, stores and marketplaces to sell its products in India. That will change this year.
At the company's annual general meeting on Wednesday, managing director Tim Cook announced to investors that Apple will open its online store in India, the world's second largest smartphone market, sometime this year, and will open its first stationary flagship store next year.
"I firmly believe in the opportunity in India," said Cook. "It is a country with a vitality and demography that is second to none."
theinformationsuperhighway reported last month that Apple plans to open its online store in the third quarter of this year, and its brick-and-mortar store is unlikely to be available in the country this year.
India, perhaps the last major growth market for American technology giants, was a mystery to Apple and several companies that sell premium items.
It's a big market that continues to grow, but most people in the country can't afford Apple products. According to the research company Counterpoint, the vast majority of smartphones shipped in India are priced at $ 150 or less.
For Apple, the other challenge was the high import duty New Delhi charges on electronic items. This has made the iPhone even more expensive for people in India as the company passes the additional costs on to customers.
Apple has tried to increase its attractiveness in India by trying to lower the prices of its cell phones. For years she asked the government to give her some tax benefits. When these talks failed, Apple did something that all Chinese phone manufacturers in India did: assemble smartphones on site.
New Delhi offers various incentives to companies that assemble electronic items on site. Two years later, Apple contractors Foxconn and Wistron assemble a number of iPhone models in India. This has lowered prices for a number of models (except for the current generation models).
These steps have already proven useful for the company. Apple shipped nearly 925,000 iPhone devices to India in the quarter ending December, researched Canalys. That number, up 200% year over year, was the iPhone manufacturer's best year to date in the country, the research company added.
Madhumita Chaudhary, analyst at Canalys, said Apple's decision to make pricing more aggressive – partnering with banks to offer customers more incentives – helped the company improve its position in a 99% Android market Smartphones.
Apple has also had discussions with content studios to expand the range of films and TV shows for the Indian audience. For example, three years ago, the company was in a late stage of talks to acquire Eros Now's Indian business for $ 300 million, which has not been reported to date, with the option to increase its stake in the listed global company theinformationsuperhighway announced direct knowledge of the matter a few months ago.
But the deal never came.
theinformationsuperhighway also reported last month that Cook could plan a visit to India to open the online store. Apple didn't comment on this story.
India has simplified retail sourcing standards over the past year, paving the way for companies like Apple to open online stores before establishing themselves in the brick-and-mortar market.