Nearly 10 years after Apple first launched the iPhone, India is beginning to figure as a key market for the iconic brand.

A stronger distribution network in tier-2 and -3 cities, cheaper financing schemes, and a focus on the enterprise segment have ensured that India has become one of the few markets where the American brand is seeing high growth.

On Wednesday, Apple CEO Tim Cook, while announcing the company’s quarterly results, acknowledged the growth in India. “India for us grew 56 per cent, and yes we are placing emphasis in these areas (emerging markets) where it’s clear there will be disproportionate growth versus the more developed areas,” said Cook.

The India growth story comes at a time when Apple is losing steam in markets such as China, where it has always been strong. “I view India as where China was maybe seven to ten years ago…I think there’s a really great opportunity there,” Cook said.

Pricing, schemes help According to Jayanth Kolla, Founder and Partner at Convergence Catalyst, Apple has brought down its price and introduced financing schemes, making its devices affordable to a larger consumer base.

The schemes have brought down the retail price of the iPhone 6S to ₹44,500 while the MRP stays at ₹62,000. The iPhone 5s is currently selling at ₹22,000. An iPhone SE is available from ₹39,000.

Morgan Stanley analysts said Apple could double its share in the $400-smartphone segment to 40 per cent. “The growth is also because they expanded a lot into tier-2 and tier-3 cities. Also, in 18 cities they’ve increased presence with three levels of retail partners,” said Aditya Agarwal, Founder, 4 Genius Minds, an authorised Apple products retailer.

Apple has also been scaling up its team in India — from about 50 employees a year ago, it has grown to 250 now and is expected to touch 300 by September, industry sources said.

What could bite Apple But there could be challenges too. There is a perception that Apple no longer makes innovative products. Upgrade cycles are increasing and there hasn’t been any new killer feature, either in the hardware or the software.