Apple Inc. CEO >Tim Cook’s visit to India this month marks a definite change of course for the technology giant. Unlike its peers, till now it hasn’t worried much about making or selling its wares in the country — and the course correction is timely. Mr. Cook’s visit, the first to India by an Apple CEO in the company’s 40-year history, comes barely a month after its first >quarterly revenue fall in 13 years . The long period of heady sales growth, making Apple the world’s most valuable company by market capitalisation, seems to have ended. Even as critics debate whether this is due to the innovations pipeline at Apple drying up or a global slowdown, the Cupertino-based company is now finding that customers in its two main markets — the U.S. and China — are not as eager as before for its premium phones and tablets. In the last six months, the Apple share has lost about a fifth of its value. Last month, maverick billionaire-investor Carl Icahn sold his stake in Apple, citing concerns about “China’s attitude”, the trigger being Beijing’s decision to shut down Apple iTunes movies and iBooks stores. This is far more serious than it may appear, as Apple offers not just hardware but a whole marketplace. It is clearly time for Apple to nurture a big, promising market. India is that market.
Mr. Cook has taken the >task of engaging with India seriously . He has ticked all the boxes — including visiting the Siddhivinayak temple, meeting Bollywood stars, watching an IPL cricket match, and calling on the Prime Minister. But he would know that India can be no match for China in the scheme of things for Apple immediately. True, India proved to be a rare high-growth region for the company in the last quarter. But that growth came from a very small base. Not only is China a key manufacturing base for Apple, it also accounts for about a fourth of its sales. As Mr. Cook pointed out, India is now where China was seven to 10 years ago. It is poised to become the second-largest smartphone market in the world but its buyers are extremely price-sensitive. Apple is premium. There is little doubt amongst analysts that there is immense potential for Apple in India in the long run. But till it gets there, Apple would want to see how much of the market it can tap for its products and its marketplace. Its plan to sell pre-owned phones, which was overruled by the government recently, was an attempt in this direction. Two announcements made by Apple during Mr. Cook’s visit — regarding the opening of its first development centre in India and the establishment of a design and development accelerator in Bengaluru — show how Apple is now looking at India not only as a market. But the big news that the Centre would have liked to hear — Apple manufacturing in India — has proved to be elusive. For now.
