Apple (NASDAQ:AAPL) has never had great success in penetrating the Indian market, with less than 2% of its global revenues generated there, amounting to roughly $6 billion. While Apple’s overall revenue from India is relatively small, the tech giant is making a concerted effort to capture more of the market. In this regard, Apple is opening its first retail stores in Mumbai and New Delhi.
For Wedbush’s Dan Ives, the openings could provide a big boost to the top-line. “Apple is now aggressively looking at India from both a production and retail expansion over the coming years that we believe will be a strategic poker move for Cupertino that could ramp annual revenue to $20 billion by 2025 in India,” said the 5-star analyst.
The openings will likely be followed by a massive domestic marketing campaign and Apple will hope to cut into Samsung and Chinese players Xiaomi and vivo’s dominance as the biggest players in Indian’s smartphone market while also replicating its success in China.
Getting into retail will be Apple’s first step in India and considering the nightmare it has had in its iPhone production in China due to the Covid lockdown issues seen during the holiday season, Ives notes Apple and its partner Foxconn are now looking at India for “more production diversification on the iPhone front.”
Further boosting production in India should go alongside expanding the retail presence, in a similar way to how Apple developed its strategy in China. All told, it might take a while until Apple reaches the sort of penetration achieved there, but Ives thinks Apple is on the right track. “Rome was not built overnight and neither will Apple’s broader India strategy,” he summed up. “However, we view this week as Apple diving into the deep end of the pool in India as this massive market slowly converts into the Apple ecosystem over the coming years with iPhone market share gains front and center.”
All in all, Ives reiterated an Outperform (i.e., Buy) rating and $205 price target on AAPL, suggesting the shares will climb 30% higher in the months ahead. (To watch Ives’ track record, click here)
Let’s turn our attention now to the rest of the Street, where based on 24 Buys, 4 Holds, and 1 Sell, AAPL currently carries a Strong Buy consensus rating. Although with an average price target of $174.86, the analysts project a modest 6% upside over the coming months. (See Apple stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
