Apple targets smaller cities.
By Dileep Thekkethil
BENGALURU: Apple has announced that it will set up 500 new stores in different parts of India as they plan to expand operation in the world’s second largest market for smartphones.
Apple’s relationship with India was moving through difficult terrain till recently and as a result of this most of the Apple devices reached India only in the last phase. The new move of the tech giant is the result of the company’s plan to reach beyond the metros to the smaller towns and cities.
Reports say the new stores will not be as big as the Apple franchise stores located in the metros and will stock only limited products. The Times of India reported that the new stores “will be smaller in size and could range from 300-600 sq. ft. against over 2,000 sq. ft. size of existing stores in bigger cities.”
Apple has not been able to open its own stores in India because of the country’s policy that doesn’t allow FDI in single-brand retail. The new stores will be opened in the franchise way and Apple will offer roughly 9.5% margin for each unit of iPhone or iPad sold through the new franchise stores. The owners will receive an immediate 5% margin upfront and the rest will be given later. The company will also provide 6% margin for Apple’s own and third party accessories of iPhone and iPad sold via the stores.
The new Apple stores will have a store manager, two sales managers and an Apple appointed iOS promoter. Each store will be provided with 10-15 demo devices of which half of the cost will be taken care by Apple itself.
There are also reports suggesting that Apple is planning for revamping their marketing technique by allocating more money for advertising their products in India. Currently Apple’s ad comes up in Indian media rarely.
Even though India is the second biggest market for smartphones, Apple has failed to find a spot inside the top five smartphone manufacturers in India despite performing well in the country’s market.
Apple is also wary of the growing market for Samsung smartphones, which is now the leader of India’s smartphone market, followed by indigenous brands such as Micromax, Karbonn and Lava.
An Apple executive was quoted saying, “All this will change now. The company is finalizing plans to become a serious player in India, which is being seen as a strategic and one of the most promising markets globally.”
Apple had launched its latest smartphone, iPhone 6 and iPhone 6 Plus, in India. According to Apple sources, the company sold more than one million units of iPhones in India till this September. By opening 500 new stores Apple expects to triple this number and cross the three million mark.