This move by Apple is absolutely brilliant and will bring success, says famous strategist

Apple's entry into India is a "strategic poker move", says top analyst. Today, we take a look at why analysts put a lot of faith in Apple and its brilliant moves that will take it a step further again in the future.

Apple has never been able to successfully push into the Indian market, where it generated less than 2% of its global revenue, or about $6 billion. Although Apple's overall revenue from India is relatively small, the tech sector giant is making concerted efforts to gain a larger market share.

Specifically, Apple recently opened its first retail stores in Mumbai and New Delhi. According to Dan Ives of Wedbush Securities, the opening of these outlets could help the company's sales considerably.

"Apple will focus on aggressive expansion in India in the coming years, both in terms of manufacturing and retail, which we see as a strategic move that could boost the company's annual revenue in India to $20 billion by 2025," the five-star analyst said.

The opening of the stores is likely to be followed by a massive domestic marketing campaign, with Apple hoping to reduce the dominance of Samsung, Xiaomi and Vivo, which are the largest smartphone makers in the Indian market, while repeating its success in China.

Entering the retail market will be Apple's first step in India. Given the nightmare Apple had with iPhone production in China due to lock-in issues related to COVID-19 disease during the holiday season, Ives notes that Apple and its partner Foxconn are now considering India for "greater diversification of iPhone production".

Further increasing production in India should go hand-in-hand with expanding retail presence, similar to how Apple has developed its strategy in China. All in all, it may take a while for Apple to achieve greater penetration in the Indian market, but Dan Ives believes Apple is on the right track.

"Rome wasn't built in a day, and neither was Apple's broader India strategy," he sums up. "However, we see this week as a step where Apple dives into the deep end of the Indian market pool as this massive market slowly transforms into an Apple ecosystem with growing market share for iPhones in the coming years."

Overall, Dan Ives reiterated an Outperform (i.e. Buy) recommendation and $205 price target on $AAPL stock.

Why is India appealing to Apple?

India is an attractive market for Apple for several reasons:

1. Extensive growth potential. The Indian smartphone market is growing rapidly and is estimated to reach 900 million smartphone users by 2025. This represents a huge potential for increased sales of iPhones and other Apple products.

2. The middle income class is growing. The number of Indians with higher purchasing power is increasing, which means more demand for premium products like the iPhone. Apple wants to become more attractive to this growing customer base.

3. Concentrated lower and mid-range smartphone market. Currently, the Indian smartphone market is dominated by Chinese companies such as Xiaomi, Vivo and Oppo, which offer low- and mid-priced models. Apple wants to enter this area of the market and gain share.

4. Efforts to diversify production outside China. Due to the US-China trade war and the COVID-19 pandemic, Apple is looking to diversify its manufacturing base outside of China. India is a promising alternative given its size and low cost.

5. Significant revenue and profit potential. India can bring Apple billions of dollars in revenue and profits in the coming years if it can gain a larger share of this market. This would significantly stimulate the company's growth.

Last but not least, India is the second largest smartphone market in the world after China. According to various estimates, there are currently 500 to 600 million active smartphones in India. Approximately 150 million new smartphones are sold in India every year.

Please note that this is not financial advice. Every investment must go through a thorough analysis.