Apple of the Indian Eye

SANDEEP RANADE HAS assumed a self-styled moniker: ‘Geek Gaayak/nerd singer’. The Johns Hopkins alum is also a veteran of both Microsoft and Google but lately, has found his calling in music. He’s the brain behind the Naad Sadhana app on Apple iOS (iPhone Operating System), which plays real-time music unlike on any other platform. “Apple has the lowest audio latency [the time between when a command is given to play an audio and the actual time when the audio comes on] among platforms, and powerful building blocks like CoreML, AVFoundation, SwiftUI, etc. allow me to focus on my work rather than the technicalities of the platform,” says the Pune-based software engineer-turned-musician who has been feted by Apple Inc with a Design Award two years ago, for his pathbreaking app that can now publish any combination of instruments (there are 10 in his kitty so far which is now being extended to 26) in any way possible post-production. When Ranade created new algorithms for digital signal processing and machine learning, he needed a real-time, high-performance platform, and that is where he found iOS to be the only alternative. Like Ranade, the Cupertino, California-based tech giant has nurtured a vibrant community of app developers who now support more than a million jobs in India.

As of March 2023, Apple makes 7 per cent of its iPhones in India, up from 1 per cent in 2021, and plans to manufacture a quarter of its iPhones in India by 2025.

Apple’s association with India is not recent, though it seems so now with a couple of stores thrown into its urban maze—the one in Mum­bai’s Jio World Drive at BKC opened on April 18, and another at Delhi’s Saket Select CityWalk mall on April 20. Apple founder Steve Jobs came to India in hippie-infested 1974, driven by idealism and hope. He visited the ashram of Neem Karoli Baba at Kain­chi near Nainital where he stumbled on the Autobiography of a Yogi by Paramhansa Yogananda, a spiritual bestseller since 1946. Jobs couldn’t make it to India later but that was the lone book on his iPad when he died in 2011. In his biography of Jobs, Walter Isaacson writes quoting him: “The people in the Indian countryside don’t use their intellect like we do, they use their intuition instead, and their intuition is far more devel­oped than in the rest of the world. Intuition is a very powerful thing, more powerful than intellect, in my opinion. That’s had a big impact on my work.”

The intuitive company that Jobs founded two years after his India trip, forayed into India with iPhone 3G in August 2008 with a whimper. Of course, it would take 15 years to launch its first company-owned stores in the country. With 659 million smartphone users, India may be second only to China. But in the pockets of Indians, the device that nestles is seldom the ‘A’ for Apple. It is most often the mundane Android, a functional behemoth. But it lacks the innovativeness of Apple’s iPhone, not to speak of its class. Across the world, it is indeed a ‘class war’ being fought between Apple’s iOS and Android. World­wide, Apple accounts for no more than a fourth of smartphone market share, which was barely 4 per cent 15 years ago. In India, Android phones outstrip iPhone by over 30 times.

Yet, when Tim Cook, the 62-year-old chief executive officer of Apple, visited India to inaugurate the two Apple stores, the hype in the media was noticeable. And, of course, Cook had a warm huddle in the capital with Prime Minister Narendra Modi who tweeted about the interaction: “Glad to exchange views on diverse topics and highlight the tech-powered trans­formations taking place in India.”

Cook’s India visit arguably came too soon after his visit to China last month. In Beijing, he profusely complimented China for its “rapid innovation and its long ties with the US phonemaker.” Cook’s visit to China was due to a meeting of the China Development Council, a government body of CEOs of foreign companies, in which the heads of firms like Pfizer and BHP were present. Cook’s praise of China was fulsome at the meeting. He said, “Innovation is developing rapidly in China and I believe it will further accelerate.” Apple undoubtedly was faced with hard times due to China’s zero-Covid policy but there were indica­tions that things were improving towards the end of 2022.

Though the steady upward march of Apple’s revenue and profit has been marred of late, it is more due to global head­winds like the war in Ukraine than China’s stubborn epidemic control measures. China is keen to convince star foreign inves­tors like Cook that the excesses related to Covid control were a matter of the past. A statement from China’s Ministry of Com­merce, headed by Wang Wentao, who had a discussion with Cook about Apple’s future plans in China, emphasised that China would “unswervingly promote high-level opening up.”

China was obviously in the know of Apple’s two major steps in the days to come. One, to open Apple stores in India, which again is a novelty as India’s FDI policy for single brand retail had a restriction that if it used more than 51 per cent foreign capital, it must source at least 30 per cent materials for assembly from the domestic market. However, the Union government lately tweaked the rule to give a five-year waiting period for domestic sourcing. So, the Modi government was indeed reworking its rules and regulations to make FDI in upscale products (that cannot be domestically sourced at the drop of a hat) possible. Besides, the performance-linked incen­tive (PLI) scheme for large-scale electronics manufacturing that intends to build the country’s electronics manufacturing supply chain and attract high-value investments in the sector was a major attraction.

Secondly, China was also aware that Foxconn, Apple’s leading supplier, was slated to launch a massive factory pres­ence in Bengaluru that would account for a quarter of iPhone’s materials. It was thus clear that Apple had decided to diversify its supply chain to India, and it was a decision regardless of the iPhone concentration in India (which is low) or the likelihood of a large share of Indian smartphone users “switching” (the term often used by the company to indicate customers convert­ing from Android) anytime soon. The Apple store is thus the stuff of fanfare. What the company is looking for is a supply-chain option, which becomes all the more urgent as war clouds gather on Taiwan and the US-China relations deteriorate at both military and economic levels.

Most modern smartphones, including iPhones, have a wide array of components, including processors, memory, display, battery, camera, speakers, microphone, etc. Most Android smartphones, including the Korean and Chinese brands, use India as a ground for assembly; the delicate components are im­ported. The question is whether India can rise to the occasion and create the digital ecosystem that the government is hoping for. China has already, and expectedly, played the Doubting Thomas as the spokesman of its foreign ministry suddenly claimed the high level of education of its workforce—the new entrants having received 14 years of education—and grimly forewarned, with its loudspeakers obviously turned to India, that what really matters is not the number of people you have but their “quality”. Can India leap across the quality gulf? Tim Cook and his team have taken a bet on it.

Apple CEOApple Storesforeign investmentIndian marketiPhonesTim Cook