After all, companies want to be where their markets are. And when one of your markets is a massive low cost producer like India, it only makes sense to mass produce there.
Cook told Modi over the weekend that Apple was watching India closely, and that there exists a possibility of opening retail stores and a manufacturing center in the country. It's a market that Apple wants to take a bigger bite out of. It currently faces major competition from Samsung and low cost Indian producers like Micromax Informatics and Karbonn Mobiles. But even a top 10 finish in smart phone sales is a major sales boost for Apple. The country surpassed the U.S. last year to become the world's No. 2 consumer of smart phones.
According to Counterpoint Research, India's smartphone user base hit 220 million as of February. To take part in that growing market, Apple was forced to slash and burn prices on its expensive iPhone 6 and iPhone 6s in order to compete with Samsung, Motorola, Micromax and Karbonn. To get a sense of Apple's market share, Apple sold roughly two million iPhones in India last year.
Market research firm International Data Corp, or IDC, said India will likely produce double-digit growth rates in the smartphone segment over the next few years, that's potentially hundreds of thousands of new iPhone sales in India.
Cook arrived in Mumbai late last week where he stayed at the Taj Mahal Palace Hotel near the famous Gateway to India monument. U.S. tech giants are trekking to India this month. The India-born CEO of
Cook and Nadella's visits underscore faith in Modi's Make in India policies -- which provide incentives for manufacturers to set up shop in the country -- and belief that India's consumer and IT market is where it's at. More than simply making India part of Apple's global supply chain, Cook pointed out how Indian tech firms can become major producers of software applications for use on the Apple operating system, for instance.
The tech savvy south is home to the bulk of India's 300+ million internet users, according to the Internet and Mobile Association of India. Telecom Minister Ravi Shankar Prasad said this month that the number of daily internet users in the country would surpass 500 million by 2016.
