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Slipping iPhone sales on mind, Apple Inc CEO Tim Cook makes India dash

By FnF Desk | PUBLISHED: 18, May 2016, 9:50 am IST | UPDATED: 18, May 2016, 11:16 am IST

Slipping iPhone sales on mind, Apple Inc CEO Tim Cook makes India dash New Delhi: World's most valuable company Apple Inc cannot ignore India anymore. And so it's time for its CEO Tim Cook to undertake a trip to one of the world's fastest growing markets, which none of his predecessors had ever done.

As the Apple boss does that, there are speculations galore on the purpose of his visit. They range from setting up a manufacturing or assembly plant to pushing refurbished or pre-owned phones, opening retail stores, tie-up with Reliance Jio and inaugurating development centre in Hyderabad.

A telecom expert, who did not want to be named, sees his trip to India as simply "a general market development visit" to prop up slipping iPhone sales, which fell for the first time in 13 years in the first quarter – January-March – of 2016.

"They (Apple) are under significant pressure to demonstrate continued momentum in iPhone sales globally. For them to start giving attention to India is in the interest of their firm. It (Cook's visit) is a general market development visit," he said.

Pankaj Mahendroo president of Indian Cellular Association (ICA) views Cook calling on India as "calibrated".

"It's a calibrated visit. They have been increasing their investment in India and it was time to make this trip. They will be opening stores here and their development centre in Hyderabad will be inaugurated," he said.

Apple's market for iPhones in most part of the world has saturated. While India's volumes may be nowhere near to the US's and China's, it is emerging as a big and fast growing market for mobile devices.

In the first quarter of the calendar year, while global iPhone sales dipped, they jumped 56% in India. Cook has acknowledged the significance of India in Apple's growth plans in coming times. He is landing in India following his China visit, where Apple announced an investment of $1 billion in taxi-hailing app Didi this month.

Speculations are rife that Cook may be here to consider setting up a manufacturing or assembly plant. This is being dismissed by many as Taiwanese electronic maker Foxconn, which manufactures all Apple's products, has already committed to invest $10 billion in India.

"Foxconn has already committed to make a big investment in India. Most of Apple's products are manufactured by them. So, I think the manufacturing decision will be dictated by Foxconn," said a telecom analyst with a leading business consultancy firm.

He also does see Cook putting his "time and effort" into pushing refurbished phones, which is not a big part of the US phone maker's revenue.

"Cook will not invest his time and effort to open up market for refurbished phone that doesn't add to Apple's revenue (in a significant way). So, I would doubt it would be his first order of preference on the visit here," he said.

What is likely to happen to for sure is the inauguration of development centre in Hyderabad. He is also reportedly expected to meet Prime Minister Narendra Modi is likely during his visit.

One thing everybody will be keenly watch would be his meeting Reliance Jio's Mukesh Ambani. Most are expecting some sort of bundled service announcement for Jio's 4G service launch later this year.

"I'm sure they (Ambani and Cook) will meet but is any earth-shaking announcement coming out it. That, I would be very interest in finding out," said a telecom analyst.

He, however, said while it would be beneficial to both for expanding their footprint in India, iPhone's pricing would have to be kept in mind.

" It will certainly be beneficial to both in expanding their footprint in India but Apple's market is not considered for reach. It is considered for its pricing. India still remains a price sensitive market.

" So, unless Jio intents subsidising, which operators globally do but nobody in India has done so far, I am not very sure what value, over and above the regular or normal partnership, it would be, he said.