Increased presence of Apple in the country will be game changer for India

Around the time Apple's Chief Executive Officer Tim Cook was on an India tour last week, our Supreme Court was dealing with a batch of petitions that sought legality to same-sex marriages and more rights to LGBTQIA+ community. Was that a mere coincidence or providential? Cook had publicly declared in 2014 that he is a gay, which, he said, was the greatest gift bestowed on him by God.

But in India, he was mostly treated as a straight man and thanks to the immense popularity that Apple products enjoy in the country, he enjoyed a celebrity status as well. Hundreds of people thronged Apple stores when Cook inaugurated them in Mumbai and New Delhi and took snaps with him for posterity.

The overwhelming response to Apple stores is an indication of why Apple is the world's most valuable company.

At the last count, Apple, which is based out of Cupertino in California, is valued at $2.61 trillion in market capitalisation on Nasdaq, which translates to a cool Rs 214.13 lakh crore. What does that number signify in the Indian context? Well, India's real GDP (gross domestic product) stood at Rs 115.21 lakh crore in the first three quarters (nine months) of FY23. That was the size of the Indian economy during April-December 2023 period. As per the estimates of the Modi government, the real GDP is expected to be around Rs 157.60 lakh crore in the just concluded FY23. Taken under any yardstick, it denotes that Apple is bigger than India, economically speaking, when we take the country's real GDP into consideration. With India becoming the world's most populated country now with 142.86 crore people, our leaders should take inspiration from Apple on how to fuel higher economic growth so that all Indians enjoy a life of quality that is on par with their contemporaries in the developed world.

For instance, it is said that Apple has recruited highly qualified people as sales persons in its stores and is paying them very high salaries, an unheard of phenomenon in the Indian retail sector. That's what happens when things are done the right way and growth is pursued with passion.

It's no exaggeration to say that Cook has been playing a decisive role in Apple's growth story for more than a decade. Apple's market capitalisation was around $350 billion when Steve Jobs, the tech giant's founder, stepped down as its CEO and anointed Cook as his successor in August 2011. Apple's market capitalisation is now nearly seven-and-a-half times of that number. Cook achieved this monumental task in a span of less than 12 years, which speaks volumes of his acumen.

Apple's revenues also zoomed by nearly four times from $100 billion in 2011 to $394.3 billion in 2022. It is no surprise that Apple is the world's largest technology company by revenue now. During his trip to India, Cook personally welcomed customers after opening the stores. That goes on to show why Cook is such a successful CEO.

I came across several CEOs of significantly smaller companies who behaved in an arrogant manner and never cared about customers; nor their staff, for that matter. Of course, such companies fail miserably one day or the other. But here is a man, who heads the world's most valuable company and yet waits at the entrance of his company's store in a far-off land flashing a smile while welcoming customers. Though we get to see the 'customer is king' slogan written at our banks and companies, it remains a mere slogan. But Cook has been practicing it in its truest sense all these years.

Coming to the business side of it, the question looming large is ‘who will benefit from the increased presence of Apple in the country? Will it be Apple or India?

Personally speaking, I think both will stand to benefit. With an ever-growing middle class, India is fast turning into a big market for high-end electronic gadgets, including smartphones. That way, India is going to be a big market opportunity for Apple. At present, Apple has less than five per cent market share in the Indian smartphone market. Its sales revenue from India increased from $4 billion in the Indian financial year FY22 to around $6 billion in FY23. With the opening of two outlets, Apple's sales will get a further boost in India.

After Covid-19 pandemic caused supply chain disruptions, global giants like Apple have been trying to reduce their dependence on China for their manufacturing needs. Under what is now popular as China-plus-one strategy, many MNCs are expanding their manufacturing base to India, Vietnam and other countries. That's the reason why Apple has been trying to expand its manufacturing base in India.

This presents a great opportunity for India. Though it has left indelible footprints in the information technology sector globally, it lags behind in electronics and computer hardware manufacturing. Like most countries, India also depends on Chinese imports in this space.

In recent years, the Modi government announced the production linked incentive (PLI) scheme to enhance the manufacturing base in the country. This PLI scheme is one of the factors why Apple's contract manufacturers like Foxconn expanded facilities for making Apple products. For instance, Apple made just one per cent of its iPhones in India in 2021. This jumped to seven per cent in 2022. Export of iPhones from India also went up by nearly four times to Rs 40,000 crore in FY23 from Rs 11,000 crore in FY22. As a consequence, overall exports by India's electronics industry jumped 50 per cent from $15.7 billion in FY22 to $23.6 billion in FY23.

As Apple is expected to focus more on the Indian market and pump in investments, it will come as a booster shot for India as more global manufacturing players will enter India. That way, the increased presence of Apple in India is a game changer for the country when it comes to electronics manufacturing, especially smartphones.

But the Modi government should create conducive atmosphere for companies like Apple to stay put in India. Otherwise, they will explore other options and countries like Vietnam will be the gainers. Therefore, it is now in the hands of the Indian government to showcase the presence of Apple and attract more companies. That way, it will not only reduce its import dependence for electronics products, but can itself emerge as an alternative global manufacturing hub to China. That can only happen if India grabs the opportunity provided by China-plus-one strategy of MNCs. Let's see what happens.