Apple ropes in distribution giant Brightstar for India sales

Apple Inc, the maker of iPhones and iPad, has decided to rope in global retail major Brightstar to sell its devices in India.

By Pankaj Doval, TNN | Updated: Jan 27, 2015, 12.50 PM IST

Apple ropes in distribution giant Brightstar for India sales

NEW DELHI: Electronics giant Apple, the maker of iPhones and iPad, has decided to rope in global retail major Brightstar to sell its devices in India. Apple is looking to increase sales from 1 million units achieved in the fiscal year ending September 30, 2014, to as many as 7 million units by 2018.

The US-headquartered Brightstar, controlled by Japanese telecom and internet giant Softbank, distributes mobile phones and other devices to more than 200 carriers in over 50 countries and has revenues of around $11 billion. It had recently bought a 51 per cent stake in (Bharti Enterprises chairman) Sunil Mittal's Beetle Teletech.

"Brightstar will soon start distributing Apple devices in India and is expected to emerge as one of the most aggressive players in the market," top industry sources told TOI.

The Cupertino-based Apple, which is the world's most valuable electronics maker, currently operates in India through two main distributors — Redington and Ingram, who in turn supply the products to regional distributors, multi-product trade channels and Apple Premium Re-seller stores and Apple Authorized Reseller outlets. Redington is one of the biggest partners for Apple in India and is believed to account for nearly 70 per cent of its sales.

Sources said that Brightstar has decided to adopt an aggressive stance for its India foray and has managed to poach Redington's top official who is in charge of the Apple business unit. Puneet Narang, a telecom industry veteran who heads Redington's iComm Strategic Business Unit, will lead the charge for the Brightstar business, the sources said.

"Narang and some key officials from Redington will be moving over to lead Brightstar's India business," one of the sources said, adding that the shift will happen in the coming weeks. The addition of Brightstar to Apple's list of India distributors is expected to put pressure on Redington's business, which so far enjoys a near-monopolyin distribution to the general trade retailers.

Brightstar already has similar arrangements with Apple for many key markets globally and enjoys a "comfort level" with the electronics giant's top management, the sources said.

"Brightstar has been working on the India plan for the last 6 months and is likely to get charge of the northern India business to begin with," another source said. "Apple has decided to get serious about the India business and is therefore re-aligning its entire distribution set-up in the country."

Interestingly, Apple has also decided to directly fund some of the above-the-line (ATL) advertising campaigns in India, something that is a rarity and is done only in big markets like the US and UK. "So far, the advertising was being managed by Apple's distributors. But now the company has decided to make its own investments in direct marketing and this will be in addition to what its distributors are spending," the source said.

The aggressive push by Apple comes in at a time when the company has decided to move out of the fringes and go big in India. Apple plans to open 500 'iOS' stores in India and the expansion will include entry into smaller towns and cities.

While Apple's unit sales volumes are minuscule when compared to what its Korean rival Samsung does, the company enjoys a strong grip in the premium phone category where its products carry an aspirational and iconic tag. The expansion will be in smaller towns and cities like Amritsar, Pathankot, Moga, Coimbatore, Trichy, Nagpur and Nasik.

For the new cities, Apple is planning smaller stores which can range between 300-600 sq ft against the over 2,000 sq ft size of existing stores in bigger cities. A franchise model is likely to be adopted for this and could be spearheaded by Redington and now Brightstar.

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