AAPL Apple Inc

By Newley Purnell and Rajesh Roy 

NEW DELHI-- Apple Inc. Chief Executive Tim Cook met with Indian Prime Minister Narendra Modi in New Delhi Saturday, the most high-profile engagement yet on Mr. Cook's dayslong charm offensive in a crucial but challenging market for the company's growth.

Mr. Cook shared Apple's plans in India with Mr. Modi and the pair spoke about manufacturing and retailing in the country, a government statement said. Mr. Modi in turn explained his Digital India initiative and sought support from the company in furthering the objectives of the program, which aims to connect hundreds of millions of villagers to the Internet.

An Apple spokeswoman didn't immediately respond to a request for details on what was discussed.

"Thank you @tim_cook!" said a message posted on Mr. Modi's verified Twitter account after the meeting, showing the two men standing together, looking at Mr. Modi's iPhone. "Your views & efforts are always enriching."

Mr. Cook in turn thanked Mr. Modi from his own official Twitter account and added that he is "Already looking forward to next visit to India."

Analysts said Mr. Cook is likely to advocate for Apple's existing proposal to refurbish and sell secondhand iPhones in the country, which would be key given 70% of smartphones sold last year in India cost less than $150.

In addition, Apple in January said it had sought government permission to open its own retail stores and sell products online to supplement Indian-owned distribution firms and retailers.

Mr. Cook's visit to India this week has seen him pose for photos with Bollywood stars, visit a Hindu temple and watch a cricket match. Apple announced plans to open two new offices in India to foster the development of mobile apps and mapping services in the country.

But while the trip may have helped raised awareness of Apple's brand in the world's second-most-populous country, the firm still faces serious obstacles selling its relatively expensive iPhones a price-sensitive market, analysts say.

Mr. Cook is seeking to ramp up revenues in India as iPhone sales fall in China, long an engine of the Cupertino, Calif. company's growth. Apple last month posted its first quarterly decline in revenue in 13 years.

India is set to become the world's second-largest smartphone market behind China, but Apple's market share was just 2.7% in the first quarter of this year, according to research firm Strategy Analytics. That is mainly due to cost: Most iPhones in the country sell for more than $500--approximately one third of what the average Indian consumer makes in a year.

Distribution is also a challenge. Apple struck a deal with China Mobile in 2013, making the iPhone available in thousands of China Mobile outlets. But in India, consumers typically buy handsets separately, often in mom-and-pop shops, and use prepaid carrier services.

Not long after Mr. Cook touched down in India, Apple on Wednesday said it is establishing a center in Bangalore, a southern Indian city home to many tech workers and startups, to encourage the development of apps for the company's iOS software, which powers its mobile devices.

The center is expected to open early next year, Apple said. India is dominated by cheap handsets running on Android, the mobile operating system from rival Alphabet Inc.'s Google.

On Thursday Apple said it is opening of a new office in Hyderabad, another technology hub in southern India, to develop mapping services for its iPhones and other products. The new facility will "accelerate Maps development and create up to 4,000 jobs" in partnership with a local IT firm, Apple said in a statement.

Meanwhile, Taiwanese electronics manufacturer Foxconn--the company officially known as Hon Hai Precision Industry Co., which makes iPhones--said last year it plans to spend $5 billion on factories, research and development across India

Amitabh Kant, the top bureaucrat at India's Department of Industrial Policy and Promotion, has said that Apple having its devices manufactured in India would be a logical step as it looks to boost sales in the country, according to local media reports.

"It's a branding exercise," Rushabh Doshi, an analyst at research firm Canalys, said of Mr. Cook's visit. "The outcome will be better awareness for Apple. It's kind of setting the stage to prove that India is an important market" for the company, he said.

Mr. Cook's movements this week have been tracked closely by local media, resulting in a torrent of print and TV coverage, along with commentary on social media sites.

Wearing a traditional scarf and bearing an orange mark on his forehead, Mr. Cook on Wednesday met with Anant Ambani, son of industrialist Mukesh Ambani, outside a Hindu Temple in the commercial capital of Mumbai.

He was also photographed at a party with two of Bollywood's most eminent stars, Shah Rukh Khan and Amitabh Bachchan. Mr. Cook even attended an Indian Premier League cricket match, a move sure to warm hearts in a nation obsessed with the sport.

The announcements about new offices in India, along with his public appearances, are likely meant to communicate that Apple is "investing in the economy and trying to drive growth," said Kiranjeet Kaur, an analyst at IDC.

"A lot of urban people would know about Apple," Ms. Kaur said, but fewer in smaller cities are familiar with the company, much less able to afford its gadgets.

iPhones are "so far out of range for most people that they wouldn't consider them," she said.

Write to Newley Purnell at newley.purnell @wsj.com and Rajesh Roy at rajesh.roy@wsj.com

(END) Dow Jones Newswires

May 21, 2016 05:32 ET (09:32 GMT)

Apple (NASDAQ:AAPL)
Historical Stock Chart
From Mar 2024 to Apr 2024

Apple (NASDAQ:AAPL)
Historical Stock Chart
From Apr 2023 to Apr 2024