Apple CEO Tim Cook is in India this week to open its first physical stores in the country, marking a milestone for the iPhone maker in the world’s second-largest smartphone market.
Cook was seen personally greeting customers as employees cheered and cheered at the company’s new outlet in Mumbai, which opened on Tuesday. He is expected to show up for the opening of a second store in Delhi on Thursday.
The move comes as the world’s most valuable company continues to look to India, eyeing its potential as both a consumer market and a manufacturing base.
In a statement on Monday, Cook highlighted Apple’s continued expansion in the country, saying its physical launch coincides with its 25th year of operation there.
“India has such a beautiful culture and incredible energy,” he said. “We are excited to continue our long history of supporting our customers, investing in local communities and working together to build a better future. »
In a separate statement on Monday, Apple (AAPL) shared a preview of its new Mumbai store, located in a property owned by Reliance Industries, the conglomerate of Indian tycoon Mukesh Ambani.
The company touts the store as one of the “most energy efficient” in the world, saying solar panels allow it to run on renewable energy only.
Apple did not respond to a request for additional comment or details about Cook’s visit.
Apple is the world’s second-largest smartphone maker, behind Samsung (SSNLF), but its 6% share of the Indian market remains low.
It is dwarfed by the country’s top five vendors, led by Samsung and Chinese smartphone makers Xiaomi and Vivo. Apple products are considered too expensive by many consumers in the country.
In India, the average salary for full-time regular workers is 18,585 rupees ($226.5) per month, according to the most recent government statistics. For comparison, an iPhone 14 starts at 79,900 rupees ($973.6), while an iPhone SE, a cheaper model, starts at 49,900 rupees ($608.2).
Apple’s position should grow, however, as it continues to expand its retail presence there and more and more customers turn to high-end smartphones.
India holds promise for business due to its large population, rising middle class and growing potential as consumers are expected to shift from basic cellphones to smartphones, according to Counterpoint Research Associate Director Hanish Bhatia .
Until now, however, Apple sold its products there online or through third-party resellers.
Indeed, the company, along with other foreign retailers, was barred for years from setting up shop in the country unless they sourced at least 30% of raw materials locally, forcing them to rely on local partners. The Indian government eased restrictions in 2019.
In 2020, Apple launched an online store in India, allowing customers to purchase its products and, for the first time, customize certain devices.
Apple had previously planned to open its first physical store in the country in 2021, although that was derailed by the Covid-19 pandemic.
Sanyam Chaurasia, mobility analyst at Canalys, said the stores would allow Apple to bring all of its products “under one roof” and guide more consumers to purchases.
The high-end smartphone category, where Apple is located, “is still driven by physical stores where consumers can touch (and) feel the device,” he told CNN.
Prachir Singh, senior analyst at Counterpoint Research, also said new store locations were key, with Delhi and Mumbai each making up the two main Indian markets for Apple, respectively.
Mumbai, for example, typically contributes 10% of overall iPhone sales in India, Singh said.
Apple started manufacturing iPhones in India in 2017 and has steadily ramped up manufacturing there.
In recent months, it has notably ramped up production in the country after suffering supply chain issues in mainland China, which accounts for the bulk of its smartphone manufacturing.
Apple significantly increased its Indian exports last year, with the number of iPhones manufactured and shipped from the country increasing by 65% over the previous year, according to Counterpoint.
Two of Apple’s top contract manufacturers, Foxconn and Wistron, were also India’s fastest growing manufacturers in the last quarter of 2022, the company said.
Last month, Foxconn CEO Young Liu also spent a week in the country and met Prime Minister Narendra Modi.
In its Monday statement, Apple said the company was working with suppliers to “produce an increasing number of components” as well as its assembly lines for iPhones.
“Apple’s work with Indian suppliers of all sizes supports hundreds of thousands of jobs across the country,” he said.
The company’s mobile app business has also grown to support more than one million developer jobs in the country, he added.
Apple’s increased business in India is part of a broader trend for companies to diversify manufacturing away from China.
In recent years, the South Asian nation has dramatically increased its share of global smartphone production, from less than 10% in 2016 to almost a fifth expected this year, according to Counterpoint.
— CNN’s Manveena Suri contributed to this report.