As Tim Cook Heads To India For Store Launches, Analyst Flags Big Opportunity To Add Country To The 'Apple Ecosystem'

Apple, Inc.’s AAPL diversification away from China amid geopolitical risks has led the company to turn its attention toward India in a big way. CEO Tim Cook will be opening the company’s first two retail stores in Mumbai and Delhi this week, as first reported by Benzinga India.

The Apple Analyst: Wedbush analyst Daniel Ives maintained an Outperform rating and $205 price target for Apple shares.

The Apple Thesis: Apple currently has a small presence in India, with the country accounting for about $6 billion or less than 2% of the company’s global revenue, Ives noted. This dynamic will change as the company eyes aggressive expansion in India from both production and retail expansion perspectives over the coming years, he said.

This “will be a strategic poker move for Cupertino” that could ramp annual revenue from India to $20 billion by 2025, he added.

Apple, the analyst said, will challenge the dominance of Samsung and Chines players such as Xiaomi and Vivo in India. The tech giant is likely to take a page out of the historically successful strategy of Chinese manufacturers in penetrating India with price points across the broad plan, he said.

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The opening of retail stores in major cities will be vital to courting more Indian consumers into the Apple ecosystem, Ives said. Apple’s retail strategy, according to the analyst, will not only get new customers but more importantly, convert Samsung, Xiaomi, Vivo and Oppo customers.

Apple will follow up on the retail strategy by producing more iPhones in India, the analyst said. He noted that Apple and its assembler Hon Hai Precision Manufacturing Company Limited HNHPF will look at India for more production diversification on the iPhone front.

“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,” Ives said.

Apple Price Action: In premarket trading on Monday, Apple shares edged up 0.30% to $165.71, according to Benzinga Pro data.

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