Briefing: Apple, Samsung renew focus on India in US-China trade war fallout
May 16, 2019
US-China trade war pushes Apple and Samsung deeper into India – Nikkei Asian Review
What happened: Apple and Samsung, two of the world’s largest smartphone makers, are deepening their dives into the Indian market as the escalating trade war puts pressure on their operations in the US and China. Nikkei cites a source who says that Apple is close to choosing a site for its first retail store in India. In addition, the company is planning to expand local manufacturing, which would allow the iPhone to avoid the 20% tariff. In a similar move, rivals such as Samsung and Xiaomi are also strengthening production capabilities and sales channels in the country.
Why it’s important: India, with its population of 1.3 billion and relatively low smartphone market penetration of 36% in 2018, presents an opportunity for smartphone makers looking to expand beyond slowing markets such as the US and China. As one of the first movers to tap the emerging market, Chinese smartphone makers like Xiaomi, Vivo, Oppo, and Transsion have established a foothold in the country, representing a record 66% of the Indian smartphone market in Q1 2019 with compelling budget devices. While Apple hasn’t really cracked the Indian market due to its relatively higher price points, a result of premium positioning and high tariffs, the company was pushed to make the shift in seek of a new growth market, especially to fend off uncertainties brought by the intensifying US and China trade tensions. Samsung, which has 22% market share and is the second-largest phone brand in India following Xiaomi, is beefing up its manufacturing capacity for high-value components in the country with the launch of two component manufacturing units to produce display panels and batteries.