Is Indian Apple Store Hype Justified?

[nahtanbob]

First hand per year? At what average price point? Also, will aspiration; looking successful drive sales, or are consumers pulling back in what could be a major global recession later this year? How sensitive is the middle class Indian consumer spending towards global economic trends?

This is a long term bet. I think you are looking at mostly iPhone SEs at $300 price point
20-30 million iPhones per year is not a hard target

 

[FuturePAF]

This is a long term bet. I think you are looking at mostly iPhone SEs at $300 price point
20-30 million iPhones per year is not a hard target

A lot of phones are competitive at the price point. Is it the prestige factor if the Apple brand that wins customers or is it something else?

 

[GodToons]

Lot of hype about #Apple store in #India but how long does an #Indian have to work to afford an #iPhone? Here’s a comparison. #Pakistan #AppleStore #Delhi #Mumbai

How Many Hours of Work Buys an iPhone 12 in India, Pakistan?

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

It takes an Indian minimum wage worker twice as long to afford an Apple iPhone 12 as his Pakistani counterpart. A minimum wage Pakistani has to work 1,642 hours, or about 10 months of work, to buy an iPhone 12, according to Bloomberg News. An Indian minimum worker, on the other hand, must work nearly twice as long, a total of 3,254 hours, to buy it. It takes 1,791 hours in Indonesia and 2,045 hours in Egypt. Assuming a 40-hour work-week and two weeks of vacation, there are 2,000 hours of work in a year. Given these figures, it can be safely assumed that very few minimum wage workers in the developing world can afford to buy an iPhone 12.

​

Hours of Work Needed to Buy iPhone 12. Source: Bloomberg

Bloomberg reported the following on February 4 as follows: "Based on minimum wage levels, a new report from Grover.com estimates it would take 6,639 hours for a Venezuelan to earn enough for the prized smartphone and 3,254 hours for an Indian. Chinese people must work 680 hours to make enough money".

​

Minimum Wage in Selected Countries. Source: ILO via The Business Standard

International Labor Organization's Global Wage Report 2020-21 reported that the minimum wage in Pakistan is $491 a month in purchasing power parity, the highest in South Asia. India's minimum wage is $215 a month, less than half of Pakistan's.

India is one of the most unequal countries in the world, according to the World Inequality Report 2022. There is rising poverty and hunger. Nearly 230 million middle class Indians have slipped below the poverty line, constituting a 15 to 20% increase in poverty. India ranks 94th among 107 nations ranked by World Hunger Index in 2020. Other South Asians have fared better: Pakistan (88), Nepal (73), Bangladesh (75), Sri Lanka (64) and Myanmar (78) – and only Afghanistan has fared worse at 99th place. Meanwhile, the wealth of Indian billionaires jumped by 35% during the pandemic.

Neoliberal policies in emerging markets like India have spurred economic growth in last few decades. However, the gains from this rapid growth have been heavily skewed in favor of the rich. The rich have gotten richer while the poor have languished. The average per capita income in India has tripled in recent decades but the minimum dietary intake has fallen. According to the World Food Program, a quarter of the world's undernourished people live in India. The COVID19 pandemic has further widened the gap between the rich and poor.

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Calculating the Median/ average age/ income parameter is the most stupid idea. Almost in line with eminent economists like Kaushik Basu and Raghu Ram Rajan of India.

Premium products are designed as aspirational products, which implies that this is desirable for all but not designed for everyone. Only a few can afford it. India has a huge size which can afford aspirational commodities on the fly.

Apple store may not be a good idea, but this is called 'marquee' client which will be used to bring others in the fold in future.

 

[GodToons]

Unemployment in India

https://www.cnn.com/2023/05/27/economy/india-economic-miracle-issues-youth-intl-hnk-dst

High #Unemployment in #India: While people under the age of 25 account for more than 40% of India’s population, almost half of them – 45.8% – were unemployed as of December 2022. #Modi #BJP #economy #poverty #hunger Hindutva #Islamophobia


Too few jobs, too many workers and ‘no plan B’: The time bomb hidden in India’s ‘economic miracle’

Sunil Kumar knows all about working hard to achieve a dream. The 28-year-old from India’s Haryana state already has two degrees – a bachelor’s and a master’s – and is working on a third, all with a view to landing a well-paid job in one of the world’s fastest growing economies.

“I studied so that I can be successful in life,” he said. “When you work hard, you should be able to get a job.”

Kumar does now have a job, but it’s not the one he studied for – and definitely not the one he dreamed about.

He has spent the past five years sweeping the floors of a school in his village, a full-time job he supplements with a less lucrative side hustle tutoring younger students. All told, he makes about $85 a month.

It’s not much, he concedes, especially as he needs to support two aging parents and a sister, but it is all he has. Ideally, he says, he’d work as a teacher and put his degrees to use. Instead, “I have to do manual labor just to be able to feed myself.”

Kumar’s situation is not unusual, but a predicament faced by millions of other young Indians. Youth unemployment in the country is climbing sharply, a development that risks undermining the new darling of the world economy at the very moment it was expected to really take off.

India’s newfound status as the world’s most populous nation had prompted hopes of a youthful new engine for the global economy just as China’s population begins to dwindle and age. Unlike China’s, India’s working age population is young, growing, and projected to hit a billion over the next decade – a vast pool of labor and consumption that one Biden administration official has called an “economic miracle.”

But for young Indians like Kumar, there’s a flip side to this so-called miracle: too few jobs and too much competition.

In contrast to China, where economists fear there won’t be enough workers to support the growing number of elderly, in India the concern is there aren’t enough jobs to support the growing number of workers.

While people under the age of 25 account for more than 40% of India’s population, almost half of them – 45.8% – were unemployed as of December 2022, according to the Centre for Monitoring Indian Economy (CMIE), an independent think tank headquartered in Mumbai, which publishes job data more regularly than the Indian government.

Some analysts have described the situation to CNN as a “time bomb”, warning of the potential for social unrest unless more employment can be created.

Kumar, like others in his position, knows all too well the frustrations that can build when work is scarce.

“I get very angry that I don’t have a successful job despite my qualifications and education,” he said. “I blame the government for this. It should give work to its people.”

The bad news for people like Kumar, and the Indian government, is that experts warn the problem will only get worse as the population grows and competition for jobs gets even tougher.

Kaushik Basu, an economics professor at Cornell University and former chief economic adviser for the Indian government, described India’s youth unemployment rate as “shockingly high.”

It’s been “climbing slowly for a long time, say for about 15 years it’s been on a slow climb but over the past seven, eight years it’s been a sharp climb,” he said.

“If that category of people do not find enough employment,” Basu added, “then what was meant to be an opportunity, the bulge in that demographic dividend, could become a huge challenge and problem for India.”

Another bullshit statistic from CNN/ BBC, which supplies them with such crap.
All this is a formal economy number, Bharat has a huge informal economy and these statistical collections are ill-capable of handling those jobs and income. imagine having a country with 45% of unemployment will immediately go into civil war not having 6-7% GDP growth, the fastest among large economies.

any economic indicator needs to be validated against a related matrix, in case of contradiction, inferences drawn should be readjusted to align with the whole story. Sic! the old story of Lie, white lie and statistics.

 

[VkdIndian]

Brofessor @RiazHaq, Apple products are considered a little aspirational. An average joe with low income goes for many other brands that provide terrific value at lower prices then Apple products. India has huge disparity in wealth and there are large numbers who can easily afford Apple products.

A stupid and irrelevant analysis peddled by you. It’s like comparing diamond prices and lamenting it’s accessibility to the masses.

This Apple Store is not about selling Apple stuff. Apple stuff was already available to anyone who wanted to buy and at cheaper prices. Such stores have only symbolic value and shows the rising economic strength of India. I know it hurts you quite bad.

Smart phone penetration in India is very good for it’s per capita income.

Had you tried to see this by removing anti-India glasses, you would have come across the fact that Apple isn’t even in the first five companies in sheer numbers in mobile phone sales. Apple has only 3.9% market share in India. Largest are Samsung, Vivo, Xiaomi, Oppo and Realme. Does this indicate anything? Didn‘t these aspects cross your mind? Or you were too engrossed in anti-India mindset to ignore it and further sully your already sullied image as an analyst?

Come on Brofessor? Do some useful analysis rather then peddling low quality stuff.

 

[nahtanbob]

A lot of phones are competitive at the price point. Is it the prestige factor if the Apple brand that wins customers or is it something else?

I was an Android smartphone user buying phones in the $200-$400 price points. I am somewhat disappointed at the quality of the Android phones at those price points. I saw the iPhone SE. I have purchased four phones for me/family at average price of $300. I have not been disappointed.

 

[Paitoo]

So I don't understand all this hype about promoting Apple products. Focus should be on increasing local online citizenship and education at a lower cost and not blind pointless salivation over name-brand products-du-jour which has become a disease of sorts in India these days to beat the next door neighbor or colleague. One had to say it, I'm sorry.

I am also not into this hype for the sake of it, but building (even assembling) products to a certain quality standard does uplift the entire chain. When tier 1, 2, 3 suppliers start getting used to stringent QC, over time they can supply these products to local manufacturers as well. This is what we witnessed in the Indian automobile industry, first with the Suzuki JV and then with the coming of the Koreans.

 

[FuturePAF]

I was an Android smartphone user buying phones in the $200-$400 price points. I am somewhat disappointed at the quality of the Android phones at those price points. I saw the iPhone SE. I have purchased four phones for me/family at average price of $300. I have not been disappointed.

Apple products do come with a known physical and software quality point.

Have you been to Apple stores outside of India, and if so, how does the Indian store compare with the foreign stores? If customers aren’t buying high margin phones, is setting up stores beyond a few showrooms in the largest cities worth it?

 

[surmabhopali]

Lot of hype about #Apple store in #India but how long does an #Indian have to work to afford an #iPhone? Here’s a comparison. #Pakistan #AppleStore #Delhi #Mumbai

How Many Hours of Work Buys an iPhone 12 in India, Pakistan?

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

It takes an Indian minimum wage worker twice as long to afford an Apple iPhone 12 as his Pakistani counterpart. A minimum wage Pakistani has to work 1,642 hours, or about 10 months of work, to buy an iPhone 12, according to Bloomberg News. An Indian minimum worker, on the other hand, must work nearly twice as long, a total of 3,254 hours, to buy it. It takes 1,791 hours in Indonesia and 2,045 hours in Egypt. Assuming a 40-hour work-week and two weeks of vacation, there are 2,000 hours of work in a year. Given these figures, it can be safely assumed that very few minimum wage workers in the developing world can afford to buy an iPhone 12.

​

Hours of Work Needed to Buy iPhone 12. Source: Bloomberg

Bloomberg reported the following on February 4 as follows: "Based on minimum wage levels, a new report from Grover.com estimates it would take 6,639 hours for a Venezuelan to earn enough for the prized smartphone and 3,254 hours for an Indian. Chinese people must work 680 hours to make enough money".

​

Minimum Wage in Selected Countries. Source: ILO via The Business Standard

International Labor Organization's Global Wage Report 2020-21 reported that the minimum wage in Pakistan is $491 a month in purchasing power parity, the highest in South Asia. India's minimum wage is $215 a month, less than half of Pakistan's.

India is one of the most unequal countries in the world, according to the World Inequality Report 2022. There is rising poverty and hunger. Nearly 230 million middle class Indians have slipped below the poverty line, constituting a 15 to 20% increase in poverty. India ranks 94th among 107 nations ranked by World Hunger Index in 2020. Other South Asians have fared better: Pakistan (88), Nepal (73), Bangladesh (75), Sri Lanka (64) and Myanmar (78) – and only Afghanistan has fared worse at 99th place. Meanwhile, the wealth of Indian billionaires jumped by 35% during the pandemic.

Neoliberal policies in emerging markets like India have spurred economic growth in last few decades. However, the gains from this rapid growth have been heavily skewed in favor of the rich. The rich have gotten richer while the poor have languished. The average per capita income in India has tripled in recent decades but the minimum dietary intake has fallen. According to the World Food Program, a quarter of the world's undernourished people live in India. The COVID19 pandemic has further widened the gap between the rich and poor.

Related Links:
Haq's Musings

South Asia Investor Review

Pakistan Among World's Largest Food Producers
Naya Pakistan Housing Program
Food in Pakistan 2nd Cheapest in the World

Indian Economy Grew Just 0.2% Annually in Last Two Years
Pakistan to Become World's 6th Largest Cement Producer by 2030
Has Bangladesh Really Left India and Pakistan Behind?

Pakistan Projected to Be World's 7th Largest Consumer Market

Coronavirus, Lives and Livelihoods in Pakistan

Vast Majority of Pakistanis Support Imran Khan's Handling of Covid19 Crisis

Pakistani-American Woman Featured in Netflix Documentary "Pandemic"

Incomes of Poorest Pakistanis Growing Faster Than Their Richest Counterparts

Can Pakistan Effectively Respond to Coronavirus Outbreak?

How Grim is Pakistan's Social Sector Progress?

Pakistan's Sehat Card Health Insurance Program

Trump Picks Muslim-American to Lead Vaccine Effort

COVID Lockdown Decimates India's Middle Class

Pakistan Child Health Indicators

Pakistan's Balance of Payments Crisis

How Has India Built Large Forex Reserves Despite Perennial Trade Deficits

India's Unemployment and Hunger Crises"

PTI Triumphs Over Corrupt Dynastic Political Parties

Strikingly Similar Narratives of Donald Trump and Nawaz Sharif

Nawaz Sharif's Report Card

Riaz Haq's Youtube Channel

PakAlumni Social Network

There is a local saying in my village " tel jale teli ka dil jale mashalchi ka "

India is progressing that is all , why it is not ok with our Pakistani brothers?

Indians are buying , using , manufacturing , exporting Apple phones from India , what is problem for @RiazHaq ? Are bhai pakistan wale tum log mat kharido hamara phone , koi jabardasti nahi.

 

[nahtanbob]

Apple products do come with a known physical and software quality point.

Have you been to Apple stores outside of India, and if so, how does the Indian store compare with the foreign stores? If customers aren’t buying high margin phones, is setting up stores beyond a few showrooms in the largest cities worth it?

I assume it is just one Apple store for now. Even if Apple has 40-50 stores in India in major urban areas the cost to Apple is minimal.

The big issue is if Apple can make 50% of iPhones in India on sustained basis without any major hits to quality/margins. I know they can hit 20% easily.

I am also not into this hype for the sake of it, but building (even assembling) products to a certain quality standard does uplift the entire chain. When tier 1, 2, 3 suppliers start getting used to stringent QC, over time they can supply these products to local manufacturers as well. This is what we witnessed in the Indian automobile industry, first with the Suzuki JV and then with the coming of the Koreans.

Trust me - if Apple setup a factory in Bangladesh Bilal9 would be dancing naked in the street

 

[FuturePAF]

I assume it is just one Apple store for now. Even if Apple has 40-50 stores in India in major urban areas the cost to Apple is minimal.

The big issue is if Apple can make 50% of iPhones in India on sustained basis without any major hits to quality/margins. I know they can hit 20% easily.


Trust me - if Apple setup a factory in Bangladesh Bilal9 would be dancing naked in the street

Is there doubt that it can be done in India? Does apple doubt the quality of the work force?

Perhaps they know there is a risk the factory could be trashed again. Not paying the workers usually ends badly.

 

[nahtanbob]

Is there doubt that it can be done in India? Does apple doubt the quality of the work force?

Perhaps they know there is a risk the factory could be trashed again. Not paying the workers usually ends badly.

Apparently in that case the Taiwanese vendor did not pay wages to workers. Not sure how that happens

India's first iPhone maker is quitting amid Apple's rise

The Tatas will take over Wistron’s factory near Bengaluru, which saw workers' unrest in 2020

qz.com

https://www.cnn.com/2023/02/10/tech/india-apple-iphone-manufacturing-china-rival-intl-hnk/index.html

You make it sound like assembling iPhones is rocket science. It isn't. If India can make $250 billion providing diverse set of engineering services manufacturing iPhone should be an easy task from the technical standpoint. the real challenges are bottlenecks with bureaucracy/infrastructure.

 

[FuturePAF]

Apparently in that case the Taiwanese vendor did not pay wages to workers. Not sure how that happens

India's first iPhone maker is quitting amid Apple's rise

The Tatas will take over Wistron’s factory near Bengaluru, which saw workers' unrest in 2020

qz.com

https://www.cnn.com/2023/02/10/tech/india-apple-iphone-manufacturing-china-rival-intl-hnk/index.html

You make it sound like assembling iPhones is rocket science. It isn't. If India can make $250 billion providing diverse set of engineering services manufacturing iPhone should be an easy task from the technical standpoint. the real challenges are bottlenecks with bureaucracy/infrastructure.

It’s not rocket science, but margins will decrease or go negative if a certain volume is not produced per factory per year or there are disruptions to the production if the factory work is stopped for any reason.

The Taiwanese owners reputation maybe harmed with the Indian partner, but it’s India’s reputation that gets harmed due to the actions of the workers.

What legal recourse did the workers have to being paid in a timely manner?

 

[nahtanbob]

It’s not rocket science, but margins will decrease or go negative if a certain volume is not produced per factory per year or there are disruptions to the production if the factory work is stopped for any reason.

The Taiwanese owners reputation maybe harmed with the Indian partner, but it’s India’s reputation that gets harmed due to the actions of the workers.

What legal recourse did the workers have to being paid in a timely manner?

China has left Apple with no choice. Tim Cooks is running a $2 trillion corporation. He has to mitigate risks. It would not be my choice to relocate 50% iPhone production to India. It is not like the iPhone has 500 components. It has 30 components. China makes only 5 components or less.

 

[FuturePAF]

China has left Apple with no choice. Tim Cooks is running a $2 trillion corporation. He has to mitigate risks. It would not be my choice to relocate 50% iPhone production to India. It is not like the iPhone has 500 components. It has 30 components. China makes only 5 components or less.

It will be interesting to see how China adapts.