Apple Inc. (NASDAQ:AAPL), riding high on the success of iPhone in India, may triple the number of “exclusive stores” in the country by 2015, as reported by India Times. As per the report, iPhone maker will have around 200 exclusive stores in India by 2015.
As per the report these plans might have been discussed during a recent visit of Hugeues Asseman, Apple Inc. (NASDAQ:AAPL)’s vice president (sales) for Europe, Middle-East, India, and Africa. Hugeues during his visit met various key partners and franchisee owners to take stock of the company’s India business and design the company’s expansion plans
The business model of Apple for India is slightly different from the other countries. In India, Apple has 17 franchisees that operates and sell its products and are called as Apple Premium Resellers. Apart from expanding the number of exclusive stores, Apple may also up the big-box retailers that sell its products around India.
Apple Inc. (NASDAQ:AAPL) knows very well that the expanding Indian market will be a vital battleground in the coming years. The company presently holds a single digit market share in the country. According to Apple CEO Tim Cook, the complex process of actually distributing products to India is the main culprit for the sluggish performance as it adds extra costs the company must account for.
Other than the distribution problem statutory rules also hinders the growth. Indian law requires all foreign retailers to source 30 percent of their product sales from local companies. This means that 30 percent of the products sold in Apple’s own stores must come from an Indian partner, which is a big problem for the company like Apple as it relies heavily on China-based companies like Foxconn Technology Co., Ltd. (TPE:2354) to manufacturer its devices.
Realizing the potential, the iPad maker has launched a massive advertisement campaign in the country. To boost the sales, Apple Inc. (NASDAQ:AAPL) is offering iPhones on equated monthly installment (EMI) scheme; a similar strategy is used by its Korean rival. The company also started offering EMI schemes on iPads. Currently, Apple Inc. (NASDAQ:AAPL) has 65 exclusive stores in India owned and managed by franchisees.
It will be a tough challenge for Apple Inc. (NASDAQ:AAPL) to compete with Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930), the smartphone market leader in India and across the world. The Korean company holds about 38 percent market share in the country with over 500 exclusive smartphone and tablet stores.