About Apple’s plans to open Apple Stores in India

Nothing gets more page views than a story about Apple, especially one that makes tall claims about something that has already been dismissed twice by CEO Tim Cook. Today was no different when ET ran a story about how Apple’s plans for starting its Apple Stores in India have hit a roadblock due to the Indian government’s local outsourcing policy when it comes to a foreign single-brand retail entity.
It then goes on to claim that somehow having its own retail presence would help Apple get around the multi-layer distribution model that Cook blamed for high prices of Apple products in India.
Cook said during the last earnings call that “Apple has some higher potential in the intermediate time in some other countries” and that fact does not change irrespective of whether the government eases norms for Apple’s entry or not. At the moment, Apple has its eyes set on China, Brazil and certain South East Asian countries. Earlier in January too Cook rubbished reports about opening an Apple Store in India. At that point too he called India to be a growing market but having too small an installed base to warrant an Apple Store.
Every company, Apple included, would keep doing the groundwork in order to be prepared if and when the day comes to implement their India plans. Coming up with a complete retail strategy and executing it takes years and simply evaluating options (if they are) does not lead to anything concrete. Don’t be surprised if Apple already has narrowed down on a few possible locations for an Apple Store but again, that does not mean anything. It is just part of the preparation.
However, extrapolating it to suggest how Apple having its own retail presence in India would lead to lower iPhone prices and other Apple products by WSJ is simply misinforming the readers. In order to ignore third-party retailers and distributors that form the “multilayer distribution model”, Apple would need a nation-wide retail presence rather than having an Apple Store or two in a couple of cities. At the moment too much is made out of Apple Stores and in reality, even if Apple opens a store in India it won’t have that big an impact of what is being made out of it.
Apple understands, like many other companies before it, that tackling India is not that easy. One cannot ignore mom-and-pop stores, leave aside the organized retail chains. The solution is to embrace them and do things the Indian way and Apple is doing just that. We earlier exclusively reported how Apple is going to retail the iPhone 5 in India on its own rather than having its carrier partners Aircel and Airtel do it for them. To do this, Apple has ramped up its sales team in India and has hired Redington and Ingram Micro as its two distributors for the iPhone. And that is a more decisive move than bringing an Apple Store here.