Apple’s investments in India are beginning to reap rewards

It should by now be clear the extent to which Apple sees India as a strategically important market to which it continues to commit.

Apple’s investments in India

The company has been extending its relationship with the nation for years, so the decision to increase iPhone production there isn’t a huge surprise in the context of creaking supply chains and ongoing geopolitical tension. How Apple has approached building business in India arguably represents a strategic guide any company should follow when expanding into any developing economy.

Like every relationship, it began with communication when CEO Tim Cook took a trip to India in 2016 to signal the importance of the nation to Apple’s long-term plans. “We’re not here for a quarter, or two quarters, or the next year, or the next year,” Cook told NDTV. “We’re here for a thousand years.”

Promise, research, invest

Following the promise means backing up words with actions and given Apple’s size those actions must also scale. They have.

Consider all the many different visible commitments and months of extensive negotiation between Apple, local, and national governments, including the iPhone maker’s supply chain partners. These talks led to some relaxations in India’s policy, the introduction of various inducements to convince suppliers to set up manufacturing centers in India, and more.

For its part, Apple also put meat on the bones. It has a huge developer center in Hyderabad, India where much of its Maps development takes place; it now offers an online store there and is likely to add retail outlets starting next year. That investment in software development in India also helps the company reach the nation’s many brilliant developers.

Apple has put some of its CSR investments into projects across the nation, and its partners have already begun manufacturing some iPhones there. Today’s news that Apple will make iPads and iPhone 14 devices in India simply extends this existing and expanding relationship. (As it seeks to diversify, Apple is also exploring manufacturing in Mexico and expanding its presence in Vietnam.)

Apple is now growing rapidly in India

The world’s second-biggest smartphone market, India is turning into a highly lucrative market for Apple. Revenues there almost doubled in the most recent quarter, the company said, and this success extends to service revenues, which set all-time records in the country. The company broke its iPhone, iPad, and Mac sales records in India last year.

It’s important not to underestimate the value of digital services and 5G broadband in nations such as India, in which internet access is primarily delivered wirelessly due to the relative lack of fixed-line infrastructure. With 5G, excellent services and a proven and visible commitment to the country, the brand dominates the premium device segment, now holds roughly 20% of the local smartphone market and seems on track for even more growth.

Engagement and negotiation are essential

Apple’s success in building business in India has required the company to focus on solving some big challenges. It took a great deal of negotiation and skill to find ways around the nation’s earlier economic protectionism — at one point, Apple’s devices carried huge surcharges which were only mitigated by beginning production there.

These challenges also extended to leveling up the treatment of workers at its partner factories. Foxconn was forced to shutter its factory in Chennai for months following an appalling food poisoning incident that affected workers there. At that time, it was reported that food and accommodation were not up to the standard Apple wanted — which, given all the years of reports concerning worker treatment at Apple factories, was a problem the company could have done without.

Another seemingly unresolved challenge concerns secrecy.

You see, even though everyone seems to know every detail of Apple’s business because some leakers appear to have such deep insights into its activities, Apple is, culturally at least, a highly secretive company. Apparently, the company wanted to begin iPhone production in India earlier, but ascertained that maintaining the same degree of secrecy it keeps in China in would be “challenging to replicate.”

That’s a lesson in itself, of course: every market is different and any business setting up shop needs to take into account those differences. Sometimes you need to tweak the way you do business in a new nation to reflect what is possible. This is what Apple seems to have done, given its decision to begin iPhone 14 production in India a couple of months after production starts in China. (That two-month time lag also suggests not every new iPhone model will be made available immediately.)

The bottom line? Deep involvement

Any business seeking to build up a presence in new markets needs to become deeply involved in that nation, must engage deeply to recognize and meet local need, and should display clarity of purpose and commitment.

This is precisely what Apple set out to do when it began its work there.

Setting up shop abroad is seldom as simple as just replicating the same business model; it requires commitment to the long haul and adjustment to local needs. Apple’s rewards for doing just that are only now beginning to beginning to be realized. How can your company explore this economic opportunity?

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Copyright © 2022 IDG Communications, Inc.

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