India is a market where Apple has already won itself a solid user base, with the brand having a near 50% share on the premium phone market. Image Credit: Reuters

Cupertino: Apple Inc. is poised to open an online store for the first time in the fast-growing smartphone market of India next month, taking advantage of a relaxation of once-strict prohibitions against foreign direct retail.

The online store will be ready for operations just ahead of the festive Diwali spending season. The iPhone maker, which lobbied New Delhi for years to get around regulations that force companies such as Apple to source 30 per cent of components locally, had originally planned to start online sales within months after the government relaxed the rule last year.

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Those plans were disrupted by the coronavirus pandemic.

A market for the taking

India's 1.3 billion people represents a large, under-served smartphone market that is becoming an increasingly important focus for Apple even as the pandemic raged this year. The company, which has just made history by surpassing $2 trillion in market value, is boosting investments in the South Asian country to reduce its dependence on China both as a market and manufacturing base amid escalating tensions between Washington and Beijing.

Apple also plans to open a second brick-and-mortar store in the technology hub of Bengaluru, following an outlet in Mumbai that will be its first physical location in the country. The iPhone maker's first physical store will open next year in the plush Mumbai neighborhood of BKC, while it's already scouted nearly half a million square feet of space right in the heart of Bengaluru.

Apple currently offers its devices in India through stores owned by franchise partners and via online platforms including Amazon.com Inc. and Walmart Inc.-owned Flipkart Online Retails Services. Selling through its own stores and via its website could help the company control branding and win customer loyalty while leveling the field with competitors like China's OnePlus and South Korea's Samsung Electronics Co.

Building its base

Alongside the expansion of its retail presence in India, Apple has been assembling its newest handsets, the iPhone SE and the iPhone 11, in the country through its manufacturing partners Foxconn Technology Group and Wistron Corp. Another assembly partner, Pegatron Corp., will set up its first plant in India.

Apple dominated India's premium smartphone segment with a market share of 49 per cent during the second quarter, according to researcher IDC. The newer iPhone 11 and the iPhone XR together comprised 28 per cent of high-end shipments, indicating that demand for pricier iPhones is growing which is a contrast to a couple of years ago when cheaper and old models accounted for a big chunk of iPhone sales.