Introduction
Apple is one of the global leaders focused on producing smartphones and other electronic devices. Being an international multinational company, it focuses on constantly improving its work and entering new markets to support a high income level. For this reason, its decision to enter the Indian market was part of its strategy aimed at global dominance. Thus, the brand focused on diversification, social media, opening local stores, and expanding its production in India as part of its entry strategy. In 2018, Apple achieved only $1.8 billion in revenues, less than half its goal for that period. This reduced Apple’s market share from 2% to 1% (Cohan, 2018).
However, India’s foreign direct investment (FDI) liberalization became a win for Apple as it helped compensate for years of poor results (Singh, 2019). It allowed the company to open its retail stores, sell various products, and offer online services to clients (Singh, 2019). As a result, after 2019, due to the beneficial FDI rules, Apple’s entry strategy became more practical and generated income.
Currently, Apple is evolving in India and is showing a stable speed of development. Although local markets have issues, such as high product prices or low battery capacity, they struggle with their main competitors (Cohan, 2018). Apple continues to step up its efforts in India, looking to gain more market share and strengthen its presence in the country, one of the fastest-growing technology markets in the world. This phenomenon requires separate consideration, and this report analyzes Apple’s strategy for entering the Indian market.
The Firm’s Choice of Entry Mode
Apple Inc. operates in India today, appealing to its plans to expand business worldwide. The leaders are confident that India will be the region Apple will focus on shortly, since last quarter, the company’s revenue in India reached record highs and grew by double-digit percentages (Kharpal, 2023, para. 1-2). Notably, Tim Cook once said: “India is a hugely exciting market for us and a major focus” (Kar, 2023, para. 3).
Tim Cook is most impressed with a vast market with an expanding middle class and the likelihood of building a base to produce millions of Apple devices (Leswing, 2023, para. 1). The organization has focused on developing in India since 2016 (Leswing, 2023, para. 1). Thus, this approach has many positive aspects, influencing the company’s decision.
Firstly, India could be one of Apple’s biggest markets in the future, as this country has a huge population. According to Sundaram (2023, para. 3), at the beginning of 2023, India’s population surpassed China’s, reaching more than 1.400 billion people. India’s diverse culture creates new opportunities for product design and marketing. Secondly, India has a fast-growing economy and a well-developed mobile and telecommunication market worldwide.
Apple actively sells its products in the country through retail and online stores, and revenues from product sales in India tend to be much higher than in America (Daniels et al., 2019, p. 539). Furthermore, over the past decade, India has gradually overtaken the U.S. regarding the number of app downloads (Telecom industry in India, 2023, para. 1). There is a trend in the development of telecommunications in the country and significant growth in the subscriber base of over a million people.
The local economy can show the fastest growth compared to other states because of the current government’s ambitions and China’s logistical and geopolitical issues. In 2022, Prime Minister Narendra Modi urged the nation to aspire to world leadership instead of settling for less (Winkler, 2023, para. 13). In addition, U.S. Commerce Secretary Gina M. Raimondo came to India on a business visit to agree on close cooperation in the supply of semiconductors.
Since the late 2010s, trade with China has been under increasing pressure from the trade war with the United States (Zeng, 1-2). China’s ‘Zero-COVID’ Policy disrupted supply chains, and this moment forced manufacturers to look at other partners (Hille et al., 2022, para. 8). One of the options was India, as in the future, it could serve as a “bridge” between east and west, north and south. India’s growing economy and rising income levels make it an attractive country for Apple’s business.
Thirdly, India offers favorable conditions for producing and selling smartphones and other devices, which allows Apple to save on costs and increase profits. Essentially, India offers affordable labor resources for large corporations like Apple. Finally, India is an essential region for Apple’s growth, and the firm intends to take advantage of its chance to exploit it. The Indian government wants to work with Apple to expand regional production (Leswing, 2023, para. 4).
The more popular manufacturers and retailers appear in India, the more chances they have of attracting other players. This is partly why the Indian leaders want to work closely with Apple to get many benefits. India is a promising target market for Apple to realize its potential within the company’s global expansion strategy. The corporation sees an opportunity to attract many new customers, especially younger ones. Apple is, first and foremost, a big business, and any business goal is to make money. Not willing to lose money, Apple decided to invest in India.
The Internationalization Theory is one of the theories explaining Apple’s indirect exports to India before 2019. This theory explains the essence of the company’s entry into the market most clearly and in detail, mainly to capture a larger market share. The company gradually increased its product shipments through 2019, shipping nearly 2 million smartphones each time (Singh, 2020, para. 1). Customers particularly liked these smartphones, and Apple did not back down and continued to make deliveries to move the target audience from competing smartphones.
India’s FDI and Apple’s Success
However, as stated previously, Apple’s initial attempts to succeed in India’s market were unsuccessful. Thus, the choice of the entry model and its later modification were linked to the altered policy regulating FDI. The liberalization of rules linked to foreign investment and the presence of other companies transformed India into the preferred investment destination (Singh, 2019).
For instance, in the 2021-2022 fiscal year, the annual FDI inflow comprised $83.57 billion (India received the highest annual FDI inflow of USD 83.57 billion in FY21-22, 2023). In 2019, the number was $50.61 billion, meaning a significant increase was recorded (India Foreign Direct Investment 1970-2023, 2023). It contributed to the revitalization of the Indian economy and the entrance of new companies with their capital and investment.
For Apple, the alteration in FDI and policies became a turning point in its evolution in India. The company acquired the change to empower its entry strategy and support it with traditionally effective approaches in other regions. The corporation overcame the barriers to local production and created local facilities (Singh, 2019).
Furthermore, better distribution through retail stores reduced the time, effort, and price needed to align with the practical work of supply chains. In such a way, India’s reconsideration of its policy on regulating FDI became a critical factor influencing the success of its strategies. In post-COVID times, the FDI inflow increased by 23%, also due to cooperation with global corporations such as Apple (India gets the highest annual FDI inflow, 2023).
In general, India is currently the preferred country for foreign investments in the technology industry (India gets the highest annual FDI inflow, 2023). For Apple, this means that its entry strategy has started to generate dividends and support the brand’s evolution in the selected region. Thus, the company shaped its methods and approaches regarding the constantly growing FDI and associated opportunities.
Overall Market Entry Strategy
Apple uses many marketing strategies in India to attract a large audience and sell its products. The company offers reasonable prices on its products, but the cost of Apple appliances in India is generally higher than in some countries (CNBCTV18.com, 2022, para. 3). Apple recently began offering more inexpensive product prices to appeal to a broader audience.
For example, the iPhone SE was released at a lower price than other iPhone models. Furthermore, Apple offers special financing programs, loans, and discounts on its products in India to make them more accessible to many people (Leswing, 2023, para. 17). Nonetheless, one must have additional funds to purchase Apple products in India due to specific taxes and import duties.
Secondly, Apple frequently presents special offers and discounts on its products in India to attract loyal and potential customers. Moreover, the firm offers an exchange program for clients who want to upgrade their devices (iPhone upgrade program, no date, para. 1). As in other countries, Apple periodically offers discounts on its products in India.
Some of the most frequent discount options include discounts for students, special offers for company employees and civil servants, special offers for businesses, deals on past models, and discounts on holidays. However, Apple faces competition from local smartphone manufacturers such as Xiaomi, Vivo, and Oppo, which offer more affordable prices and better adaptation to local needs (Taneja, 2023, para. 1). Sometimes, the high price of Apple products makes them less affordable for most Indian consumers.
Thirdly, Apple actively uses social media such as Facebook and Twitter to attract new users and inform them about new products and services. The firm also uses these social platforms to promote its events and promotions and communicate with customers through messages and comments (LaFleur, 2021, para. 4). Furthermore, Apple is conducting unique marketing campaigns in India, including advertising on television, radio, and print media and hosting celebrity events to increase brand awareness and knowledge among Indian consumers.
Fourthly, the change in rules regarding FDI allowed Apple to open several stores in India to get closer to its clients and offer them better service. The company has already opened several stores in Mumbai and New Delhi (Sengupta, 2023, para. 1). These stores help to promote products and attract new customers. Hence, Apple’s new retail stores “mark a major expansion” (Singh, 2023, para. 5).
Such a decision helped Apple improve sales of its products in one of the largest economies in the world. Apple is not going to stop and plans to open new stores in India to expand its business and increase sales of its products (Bhattacharjee, 2023, para. 2). These stores provide better customer support, allowing Apple to adapt more accurately to local needs and legal requirements.
Fifthly, Apple is paying attention to expanding its device production in India. The tech giant moved production from China amid increasing geopolitical uncertainty and tough lockdowns associated with COVID-19 in this country (Singh, 2023). By producing goods and services locally, it is easier for the company to adjust its production schedules and respond to fluctuations in consumer demand. This also helps to reduce overall production costs and increase competitiveness. In this case, Apple saves on production costs and supports more jobs across India (Singh, 2023, para. 11). Thus, the corporation positions itself as a good retailer and employer, strengthening its positive reputation.
Sixthly, Apple has localized its business, adapting its products and services to India’s unique requirements to meet its customers’ needs. Hence, Apple focuses on Indian culture, paying great attention to local traditions and customs in its marketing campaigns. Apple CEO Tim Cook praises Indian culture: “India has such a beautiful culture and an incredible energy, and we’re excited to build on our long-standing history” (Singal, 2023).
Apple’s Localization Strategy in the Indian Market
As a firm aimed at winning the foreign market, Apple carefully evaluates several cultural variables, such as language, emotional expressions, social relations principles, social behavior rules and standards, local entertainment, and more (Daniels et al., 2019, p. 75). To successfully localize its products and services, Apple must be able to communicate effectively with customers in their native languages.
This required significant investments in localization and translation services, as well as in adapting marketing and advertising campaigns, considering local linguistic and cultural characteristics. Apple respects Indian culture by incorporating it into its products and services in several ways and offers a variety of colors and storage options to suit the preferences of local customers.
Apple devices offer different languages and cultural options that match the Indian audience, using local music and dances in their advertising. Siri has an Indian version of the language and can answer many questions about Indian culture, recipes for Indian food, holidays, and traditions (Doss, 2019, para. 2). In addition, Apple includes Indian apps, music, and movies in its products and services to meet Indian users’ needs.
Many Indian Apple fans express their love for the company by creating beautiful designs and themes for iPhone and Mac in Indian style. In India, Apple has partnered with several banks to offer attractive financing options to customers. In addition, Apple has localized its retail stores, adopting the design and aesthetics of the local environment (Sharma, 2023, para. 1).
Apple retail stores are distinguished by a unique design in which traditional Indian elements are combined with modern technologies. Apple has invested in the Indian market and established an office in Hyderabad, developing innovative products for domestic use and export (Apple opens a development office in Hyderabad, no date). The company continues enriching its marketing experience by immersing itself in Indian culture and learning about its characteristics.
In general, Apple is actively working to improve its products to meet the needs of Indian consumers. For example, the company added dual SIM card support to the iPhone, an essential requirement for many Indian consumers (Apple dual SIM mobile phones, no date, para. 1). Apple is improving its retail network in India by adding new stores and partners to make its products more accessible to Indian consumers. Apple is strengthening its presence in India by developing a local ecosystem that includes the sale of apps, music, and other digital content (Airtel and Meta, no date, para. 1).
This helps the company increase its audience volume and improve the user experience. Apple is also partnering with local companies to improve its presence in the local market. Thus, Apple has partnered with Reliance Jio in India to provide free Apple TV+ subscriptions to its customers (Apple does a Jio, 2019, para. 1-2). The company is trying to create more attractive and affordable products for Indian consumers, improve the quality of its services, and strengthen its presence in the growing Indian market.
Strategy Analysis
Altogether, several important aspects should be outlined in analyzing Apple’s entry strategy in India. First, initially, the company focused on using indirect sales through partners, diversification, and focus on its well-known and recognized brand. Although the market was analyzed correctly, the company failed to attain significant success because of the lack of opportunities to operate within the state. The restrictions on foreign direct investment prevented Apple from opening its retail stores or facilities necessary for producing products. As a result, manufacturing and distribution costs were high, while a lack of interest in products was observed.
However, the reconsideration of the policy on FDI by the Indian government became a stimulus for the increased effectiveness of the selected strategy. The entry measures, such as differentiation, interaction with clients, and online presence, were supported by the ability to open local retail stores and manufacturing facilities by avoiding third parties. As a result, Apple became one of the major actors that benefited from the continuous increase in FDI in India observed during the last years. Apple continues to focus on the premium smartphone market in the country as its prices are higher than those of competitors (Singh, 2019).
However, compared to the first years when the company entered the area, it currently performs better because of the altered strategy. Regarding the dynamic capabilities theory, Apple acquired new opportunities to build, reconfigure, and adapt its competencies and capabilities to the local market conditions (Dunning & Lundan, 2008). The brand created the basis for its future development and evolution by investing in India’s technology sphere. Nowadays, India helps Apple to generate stable income and compete with its rivals (Toh, 2023). In such a way, its strategies work effectively and generate profit.
Conclusion
One should note that Apple is a “pioneer” in engaging with the Indian innovative technology market. However, according to the CEO’s words and the company’s annual reports, Apple successfully entered the Eastern market and established a solid foothold there. A high population, a fast-growing economy, a highly developed technology sector, an inexpensive labor force, the orientation of locals toward quality foreign products, and much more combined to play a role in Apple’s decision to enter the new market. The firm began actively shipping its iPhones and other devices to India in 2019, gradually gaining audience trust, which correlates with the internationalization theory.
Apple’s marketing strategy is based on the principles of fair pricing, various promotions, social networking, a constant increase in Apple product outlets, and a focus on Indian culture. This report explains that the Indian market for Apple is promising, and Apple must expand into it. The document answered the original question and accomplished the goals and objectives.
At the same time, the successful development of Apple in India became possible due to the company’s altered policy linked to FDI. The government allowed foreign companies to operate in the region and spend large funds on developing local industries. As a result, Apple acquired the chance to open retail stores, build local facilities, and continue its evolution. India’s transformation into an FDI hub became crucial for the evolution of multiple countries in the area.
Apple is looking to expand its presence in the growing market in India, one of the largest in the world. Apple’s plans for India are not limited to sales of ready-made devices because another potential task is to establish a full-fledged production in the country to reduce dependence on China, where the company assembles almost all of its iPhones. Scaling the business can positively impact Apple’s financial performance, but it may take a decade, and the corporation is not immune to unforeseen problems.
Nevertheless, the firm’s reports show a positive trend, and the long-term development strategy of Apple in India was also recognized by Tim Cook himself. Apple wants to increase sales in India, a significant smartphone market worldwide. Apple has strong momentum in India, as the region’s premiumization trend has just begun.
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