Apple CEO Tim Cook, who arrived in India on Tuesday night, had an event-packed day in Mumbai on Wednesday, which started with a visit to the Shree Siddhivinayak Temple where he had a chance to chat with Anant Ambani, son of Reliance Industries chairman Mukesh Ambani, followed by meetings with industry leaders from the telecom, IT and banking sectors. The company also announced the setting up of a design and development centre in Bengaluru to help engineering start-ups develop mobile apps based on its iOS operating system for users in India. The new centre, the first of its kind to support developers, is expected to open in early 2017, the company said in a statement.
What is most keenly watched by industry watchers is Cook’s meeting with the CEOs and heads of telecom operators, after which he is scheduled to meet Prime Minister Narendra Modi in the capital on Saturday. Though the company did not divulge details, sources said that the Apple CEO is looking at both commercial tie-ups with mobile operators and retail chains to push sales of Apple mobile phones and seek policy support to achieve some of its goals. So far its proposal to sell refurbished phones has been rejected by the government.
On Wednesday, Tim Cook met Tata Sons chairman Cyrus Mistry, Vodafone India CEO Sunil Sood, and TCS CEO N Chandrasekaran.
He and and his team also met with the senior management of Reliance Jio Infocomm led by the latter’s chief strategy officer Akash Ambani, another son of Mukesh Ambani. He also visited the ICICI Bank headquarters to meet its CEO Chanda Kochar. On Friday, Cook is scheduled to meet Bharti Group chairman Sunil Mittal in the capital.
Industry analysts said that Apple is keen to forge partnerships with mobile operators to push sales. The tie-up, though, would not be the kind of contract sales as in the US but of the kind that bundles data benefit and cash back schemes with sales of Apple phones. To push such kind of sales, partnering with mobile phone operators and retail chains is a must.
With scope for huge penetration for smartphones in the country coupled with the onset of 4G services, the time is ripe for Apple to play its card well. According to HSBC estimates, India, which in 2014 was the third largest global market for smartphones with shipments of 81 million units (30% penetration), thus having a 6% market share globally, would inch up to seeing shipments of 259 million units accounting for 12% market share by 2019. By then smartphone penetration in the country would reach around 65%. Currently, penetration of smartphones in China stands at 95% while the global average is 72%. By geographic breakdown, based on IDC projections, HSBC has estimated that smartphone shipments would grow at a 2014-2019 CAGR of 26% in India, followed by19% in West Asia and Africa, 8% in Latin America, and 5% in China.
Cook is expected to travel to Hyderabad on Thursday, where he’s expected to announce the opening of a research and development centre. The company is investing about $25 million in the new centre, which will employ about 4,500 people. The R&D centre will first work on maps before moving on to other products.
During the January-March quarter, Apple’s sales declined 13% from a year earlier to $50.55 billion, dragged down by a 16% fall in sales of its iPhones at $51.19 billion. The iPhone contribution to total sales fell to 65% during the quarter through March from 69% during the same period a year earlier, while its services revenue contribution rose to 12% of sales from 9% a year earlier, according to the company’s earnings statement.
