Apple: Humility and bonhomie for India, money for China, and why not?

Cook’s visit to India came in the backdrop of a double-digit fall in its quarterly sales for the first time in 13 years

Harichandan Arakali
Updated: May 23, 2016 06:21:00 PM UTC
APPLE_BLOG
Cook’s comments in a television interview about approaching India with humility just as easily shows he is very aware that most Indians can’t afford to pay for an iPhone (Anindito Mukherjee / Reuters)

Apple, Inc. CEO Tim Cook’s first official visit to India has had many in the subcontinent get into the self-congratulatory mode. However, any discernible change in Apple’s stance towards India isn’t a break from the past, nor is it different from what any other big multinational company would do.

Indeed, Cook’s comments in a television interview about approaching India with humility just as easily shows he is very aware that most Indians can’t afford to pay for an iPhone — even older models such as the 5S. And if one of the country’s biggest film stars wanted to host Cook, that’s his prerogative. Apple, the company, however, is really putting its money where its mouth is — China.

Cook’s visit to India came in the backdrop of a double-digit fall in its quarterly sales for the first time in 13 years. Sales in the January-to-March period, which is Apple’s fiscal second quarter, in “Greater China,” including Hong Kong and Taiwan, fell by about a third from the previous record quarter. The region is the largest contributor to Apple’s revenues after America.

Apple has forecast a further slide overall in the current quarter that ends in June.

India isn’t in a position to remedy that for Apple, and won’t be for another decade, at least. And that is the optimistic scenario, taking into account the hope that India’s economic growth will accelerate. Apple sold more than 51 million iPhones overall in its fiscal second quarter (74 million in the previous quarter on strong China sales of the larger iPhone 6 models).

In India it probably sold about half a million, and even that is the result of determined effort over the last two years.

Coinciding with Cook’s visit, Apple announced an “accelerator” in Bengaluru to help the many software developers in India who are building smartphone apps meant to run on Apple devices. This entails not much more than having a few Apple senior engineers to hand hold talented developers in India every once in a while, and be available as and when needed. There is the Internet for that anyway.

The company also announced opening a centre in Hyderabad where it is putting together a team to work on its maps application — one which iPhone users hated, when it was first released in the U.S., in comparison with Google Maps. Companies such as Apple or Facebook or Google have the deep pockets to release a less-than-perfect product and when sometimes users just don’t like it, to keep plugging away until new features and better usability make the products more popular.

Apple said in its press release last week that the Hyderabad centre will create 4,000 jobs. That’s not the same as saying Apple itself will hire that many staffers in India. No way. The centre is more likely to have around 150 Apple staffers, eventually, and the work they do could generate additional jobs in the overall ecosystem — Apple doesn’t really provide any details on the how nor on the timeframe.

The company also said it supports some 640,000 developers and “others” in the overall Apple ecosystem in India. That number could well include people like entry-level sales staff in a shop that’s selling Apple products as an authorised reseller. Again we don’t know the details.

In comparison, Apple spends billions of dollars in China, where most recently, it invested $1 billion in Didi Chuxing, the country’s largest ride-hailing app service provider. This, on the heels of China shutting down two of Apple’s services in that market — some Goodwill hunting was perhaps called for, apart from maybe a chance to test future technologies in China.

An announcement of definite plans of local manufacturing in India was missing from Cook’s visit. Such plans are premature, given the state of the Indian market. For now Apple is doing what any large global company would, faced with the chance to make inroads into what could eventually become a significant market. It is taking incrementally more interesting steps commensurate with the level of maturity of that market. That is all.

The thoughts and opinions shared here are of the author.

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