Apple may expand retail presence in India, but plan still doesn’t include Apple Stores

Apple(s AAPL) wants to sell iPhones and iPads in India, but unlike in another populous emerging market — nearby China — it does not operate branded Apple Stores in the country. As Om noted after a recent trip to India, that may be a missed opportunity for Apple to sell more products if it can’t showcase its devices, services and customer service in typical Apple fashion. On Tuesday a new report said Apple is planning to boost its retail presence in India, but not through its traditional Apple Store model.
The Economic Times of India says it has heard from unnamed sources that Apple plans to “triple its exclusive stores to around 200 by 2015” in the country. “Exclusive stores” are certified by Apple as official resellers of Apple products — and only Apple products. They are owned by local franchisees, not Apple. The plan is said to be a part of an “aggressive” growth strategy that will also put more Apple products on the shelves of other retailers that sell competing products too.
iPhones and iPads are still pretty expensive for many locals, but Apple has made some moves to accomodate that. It started offering payment plans for its devices, much like it did in China.
There were 19 million smartphones sold in India last year. But there are estimates that by 2016 that number will be 108 million, according to IDC. Samsung has basically had the run of the smartphone market in India because of the lower price of the devices, selling about a third of all smartphones in the country last quarter.
Opening more outlets that sell iPhones is one formula to try to improve sales. But a bigger part of that equation is probably changing how local customers think of the brand. Apple’s own stores are a huge part of its success in the last decade, especially in established markets like the U.S. and Europe — and right now we’re seeing the relationship of a growing number of Apple Stores, an improving brand image and product sales momentum play out in China.
But there’s a sticking point in India Apple right now can’t overcome: Single-brand stores can be owned by foreign companies in India, but legally they have to source 30 percent of their wares from Indian companies. Until Apple starts making devices or components in India, it looks like there won’t be any Apple Store any time soon.