Apple Inc. has narrowed down on a list of locations in Mumbai for its first retail store in India, sources told Bloomberg. The company plans to make a final decision in the next few weeks. The spots are reportedly comparable to iconic Apple locations on Fifth Avenue in New York, Regent Street in London or the Champs-Elysees in Paris.
In April, Foxconn Technology Group chairman Terry Gou had said the company will be mass producing iPhones in India this year. Apple was earlier prohibited from opening its own stores in the country because it doesn’t meet local sourcing requirements, but it is now in talks with the government about its retail expansion.
After the company’s earnings report last week, CEO Tim Cook said, “India is a very important market in the long term. It’s a challenging market in the short term, but we’re learning a lot. We plan on going in there with sort of all of our might.”
India has become an extremely important for Apple given that the Chinese smartphone market is slowing down and it is losing to local rivals such as Huawei and Xiaomi. Manufacturing in India will help the company sidestep 20% tariffs on imported phones, making its prices more competitive.
In its most recent quarter, Apple generated 44% of revenue from the Americas and 18% from greater China. India is lumped in with the rest of Asia-Pacific, which altogether account for about 6%.
Research firm Canalys estimates that Apple’s shipments in India fell by more than 75% in the first quarter of 2019, giving it only about 1% of the country’s smartphone market. Apple's iPhone shipments in India fell to 1.7 million in 2018 from 3.2 million a year earlier, slashing its market share to 1.2% from 2.4%, according to Counterpoint Research. In the premium segment, Apple's market share fell from 38% to 23%.
Until now, Apple has had older, lower-cost iPhones including SE and 6S models produced in India through Wistron Corp’s local unit in Bengaluru. Foxconn Technology Group, the largest assembler of iPhones, meanwhile, has produced phones for Xiaomi and Nokia in India, but not Apple. Foxconn is running quality tests for the iPhone Xr series in India and plans to begin mass production at a facility its Sriperumbudur plant in the southern state of Tamil Nadu.
“Its own retail store might be just what Apple requires to reinforce its premium image. A store just before the next launch will be the perfect timing for Apple to restart its Indian growth story," Rushabh Doshi, an analyst with Canalys told Bloomberg.