Apple planning inroads into India’s smaller towns?

Apple’s latest iPhone 5s and 5c might not yet be out in India but that doesn’t mean the company isn’t strategising for the Indian market. Apple is planning to set sights on smaller towns in a bid to capture more of the Indian market, says a new report on Economic Times. According to the report, Apple India’s senior executives recently meet CEOs and senior executives from top electronic retail chains in India and “spelt out plans to enter the top 50 tier II and III markets in India by selling its phones, tablets and portable music players at their outlets in an exclusive corner or a shop-in-shop.

” You can view the full report here. Apple still doesn’t have exclusive Apple stores in India while China on the other hand has eight Apple stores. It appears that Apple’s India executives feel that the next level of growth for India will only take place if Apple has a bigger presence into two-tier cities. In fact, while Apple has over 10 premium resellers in Mumbai, a city like Pune has only four. Cities like Surat and Lucknow have only one Apple premium reseller, according to Apple’s India website. Apple’s iPhone 5c is seen in this launch photo. Getty Images Apple’s distribution strategy in India has undergone a drastic change since it tied up with Reddington and Ingram Micro this year. 

As we have noted in a previous article, Apple’s new tie up ensured that the iPhone is now available in a store nearby, and not just with big retailers like Croma and Reliance (which is Apple’s official re-seller in India). In fact, it’s not hard to find smaller shops in Delhi, Mumbai stocking Apple products such as iPods, iPhones, iPads and even official Apple accessories. While more stores with Apple products might soon become a reality in India’s smaller towns, one shouldn’t expect that this will mean Apple is going to slash prices of its phones. The iPhone 5c is likely to be priced between Rs 30,000 to 35,000, while the iPhone 5s will definitely be priced over Rs 45,000 like the iPhone 5 was during the launch. Apple, which has become the world’s most valuable brand according to a recent report, is unlikely to give up its premium label in India, just yet. As far as India’s smartphone market is concerned, while it is one of the world’s fastest growing ones, it is also extremely price sensitive. 

The testimony to this is that low-budget smartphones makers Micromax, Karbonn are number two and three (Behind Samsung) on the list of top smartphone vendors in India. Currently India’s smartphone market has over 67 million users, according to a report by noted analyst Mary Meeker. In the last quarter, India’s smartphone market saw a growth rate of over 50 percent with vendors shipping a total of 9.3 million smartphones in compared to 3.5 million units in the same period of 2012. 

While 9.3 million might appear to be a big number, let’s not forget that China shipped nearly 86 million smartphones in the same quarter. In the China market, Apple is struggling to be in the top five. So while Apple India might be trying to build a brand name for itself in the country’s two-tier towns and pitch itself as the phones and tablets to aspire to, remember that China is currently priority number one.

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