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Experts Weigh in on How Apple Will Impact India's Economy

© AP Photo / Rafiq MaqboolApple logo is seen during a press preview of India's first Apple Store in Mumbai, India, Monday, April 17, 2023.
Apple logo is seen during a press preview of India's first Apple Store in Mumbai, India, Monday, April 17, 2023. - Sputnik India, 1920, 20.04.2023
Within a gap of two days, tech giant Apple opened two new retail stores in India -- its first in Mumbai's Bandra Kurla Complex on Tuesday and the second one in the Saket area of Delhi on Thursday.
Over the past few months, Apple has been focusing on bolstering its footprint in India.
According to media reports published last year, the company has already accelerated its plan to shift some of its iPhone production outside China.
The tech giant has asked its suppliers to plan actively for assembling its products elsewhere in Asia, especially India and Vietnam.
The company's focus is evident as last year, Federal Telecom and IT Minister Ashwini Vaishnaw announced that Apple would be opening its biggest iPhone manufacturing unit in Bengaluru. iPhones in India are currently being assembled by at least three of Apple’s global suppliers in Tamil Nadu and Karnataka.
The manufacturing unit in Hosur in Bengaluru will be the third one.
Apple CEO Tim Cook, right, reacts after seeing an old old Macintosh Classic machine brought by a visitor during the opening of the first Apple Inc. flagship store in Mumbai, India, Tuesday, April 18, 2023. - Sputnik India, 1920, 18.04.2023
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With Apple now becoming a full stack player in India by opening two retail stores, Sputnik reached out to experts to find out the significance and the positives that India can draw from expanding its footprint and whether Indians will get any opportunity for some discounted prices.

Retail Stores Launched in India – Apple's Business Strategy

Speaking to Sputnik about the significance of opening retail stores in India, Dr. (Prof) Nishakant Ojha, Advisor – Cyber & Aerospace Security and Advisor Counter Terrorism (West Asia & Middle East) said: “It is more of a business strategy of Apple. The company wants to target the huge untapped market in India. Apart from this, the company also wants to reduce its dependency on the third party store and improve its consumer services.”
Ojha maintained that the company doesn’t want to overlap with other mobile phone makers, rather it only wants to cater to its existing consumers and also expand its footprint in India in order to tap the large segment of premium consumers.
Meanwhile, Prabhu Ram, Head-Industry Intelligence Group (IIG), CyberMedia Research (CMR) believes that both retail outlets bring the famed town square experiences that Apple flagship stores are renowned for globally, to an audience that is mostly discovering these stores for the first time.

“However, I do not foresee Apple’s existing third-party stores to be significantly impacted with sufficient headroom for both to grow in a significantly large market. The new Apple stores will provide customers with a greater array of devices and services under one roof,” Ram told Sputnik.

Ram stated that Apple loyalists as well as potential customers will enjoy the retail experience, which includes exploring and learning about the products and services, before making their device purchase considerations.
He further said that the new Apple retail stores will additionally fuel the company’s growth momentum in the year ahead, as it is supported by aggressive sales initiatives and increased domestic manufacturing.

India Has Long Way to Go to Become Mobile Phone Manufacturing Leader

Asked if Apple's big leap in India can help the South Asian country surpass China as the manufacturing hub of mobile phones, Ojha asserted that it would not happen. “If we talk about mobile phones, Apple is the biggest mobile phone producer in the world, while China is the major manufacturer. In China, the market has developed like anything and Apple still enjoys a different flavor in China,” he said.
“Sixty percent of Apple phones are produced in China. Therefore, Apple opening its store in India will not have much impact on mobile phone manufacturing in the country,” he stressed.
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However, Ram said that the wheels are slowly and steadily turning for the Make in India program. As supply chains realign further, the shift towards India is independent of a “China+1 strategy” and driven by its own merits.
“Over the next few years, India will aim to host the entire end-to-end electronics value chain within its borders. The strong bets being taken by players, such as Tala Electronics, under its new CEO, Randhir Thakur, ex-President of Intel Foundry Services (IFS) is a leading indicator. Similarly, there is a strong Vedanta push into semiconductor manufacturing,” Ram suggested.

Conflicting Views on Positives for India

Both of the experts held contradictory views about any positives that India could draw from Apple increasing its footprint in the country.
Dr. Ojha believed that it will not have much impact on the Indian economy, while Ram said that with Apple’s entry into the Indian retail market, other MNCs might also join up with investments.
Ojha said: “I don’t see any positives for India, rather, Apple will be able to establish itself as a very strong market leader in the country. In fact, they have spent massively on advertisements and there is a possibility that they might eat away the other potential mobile phones makers.”

“Apart from this, I also believe that it will also have a huge dent on Make in India and Made in India schemes. India could have only benefitted if Apple would have collaborated with some Indian company to manufacture its mobile phones but they will never do this, they will keep everything to themselves,” he contended.

However, Ram argued: “The success of Apple's retail push underlines India's ease of business, and the significant headroom for growth that the Indian economy offers. Other global MNCs in a wait-and-watch mode will gain confidence from Apple's moves, and this will potentially spur further investments going forward.”

Apple Won't Compromise on Pricing

With Apple’s manufacturing unit being set up in India and retail stores already launched, expectations are that the prices of Apple's devices might come down, but Ojha disagreed, insisting that Apple would never compromise on its prices.
Consumers who used to buy Apple devices from other countries may assume prices might go down since the items are available domestically, he noted, but there will be no drastic reduction in prices, though there might be some schemes or discounts for a limited period, he assured.
Likewise, Ram also agreed that prices might not come down, because, as he points out, there are multiple variables that go into the manufacturing and final pricing of mobiles and other products, but over the long-term, OEMs may choose to pass on the benefits to consumers.
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