What’s cooking with Apple CEO Tim Cook’s visit to India?

  • Kalyan Subramani, Hindustan Times
  • Updated: May 17, 2016 17:10 IST
Apple CEO Tim Cook (Reuters)

Apple CEO Tim Cook’s maiden visit to India is starting to resemble the $235-billion electronic giant’s encryption technology – notoriously shrouded in secrecy. Cook and his colleagues at Apple will try their best to keep it that way.

What is known so far is that the 55-year-old will drop by to meet Prime Minister Narendra Modi. Apple India says Cook’s India itinerary is not known. A spokesperson said reports of Cook’s tour plans for Delhi, Mumbai, Hyderabad and Bengaluru were unfounded.

With his mother back in Gujarat after a week at the 7 RCR, Modi would be ready for some serious business. Two items on Cook’s agenda, if one were to make an intelligent guess, would include one each close to the hearts of Modi and Cook -- ‘Make in India’ for Modi and the permission to sell used iPhones in India for Cook.

Despite a small but growing cult following for iPhones in India, Apple does not have a manufacturing facility in the country. Last calendar was not exactly a great one for Apple in India, with less than 2% share in the price-sensitive mobile phone market. The smartphone market in India is led by South Korean Samsung with a 26% market share in 2015 followed by Micromax (16%), Intex (10%), Lenovo (9%) and Lava (7%), according to data provided by CMR India.

Apple has been trying to break into the Indian market with plans to push used phones imported from other global markets. An application by Apple in this regard has already been rejected by the government.

Mobile phones with price tags above Rs 20,000 accounted for less than 7% of those sold in India in 2015. Phones within the price range of Rs 2000-20,000 accounted for 92% of the total smartphones sold in India in 2015. The larger market in India, where Apple has no presence, is the feature phone category that saw a volume of 153 million pieces last year. A feature phone incorporates options such as the ability to access the internet and store and play music, but lacks the advanced functions of a smartphone.

According to a Reuters report, iPhone sales in India surged 56% in the first three months of 2016, driven mainly by cheaper older-generation devices such as the iPhone 5S.

“The thing that (has) held not only us back, perhaps, but some others as well, is that the LTE rollout in India just really began this year, and so we’ll begin to see some really good networks coming on in India,” Cook said after Apple’s second-quarter earnings announcement.

“That will unleash the power and capability of the iPhone in a way that an older network, a 2.5G, or even some 3G networks, would not do,” he added.

LTE or Long Term Evolution is the industry lingo for high-speed connectivity, loosely referring to 4G connections.

After announcing the company’s first decline in revenue in 13 years last month, Cook said slow connectivity and a relatively informal retail structure in India were holding Apple back from realising its true potential.

“…but I view India as where China was maybe seven to 10 years ago from that point of view, and I think there’s a really great opportunity there,” Cook said.

Last Friday, Apple committed $1 billion investment in Chinese cab-hailing company Didi Chuxing Technology Co ahead of Cook’s visit to the country. Apple is yet to make any such massive financial commitment in India. Cook’s scheduled visit to 7 RCR may just result in India’s first big bite off Apple’s bank account.

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