Apple’s Strategic Alliance with Bharti Airtel: A Game-Changer for India’s Streaming Market
By Munsif Vengattil and Aditya Kalra
NEW DELHI (Multibagger) - Apple Inc. (NASDAQ: AAPL) has embarked on a transformative partnership with Bharti Airtel, India’s second-largest telecommunications provider, offering a significant boost to its foothold in the burgeoning Indian content market. This move positions Apple to better compete with industry stalwarts like Spotify (NYSE: SPOT) and Walt Disney Co. (NYSE: DIS).
Apple’s Foray into Indian Streaming: A Strategic Pivot
As part of its global strategy to diversify revenue streams via services like apps, payments, and media, Apple plans to provide free music and video streaming services to Bharti Airtel’s vast customer base of 281 million. This collaboration is poised to exponentially grow the user base for Apple TV+ and Apple Music in India, a market where Apple has traditionally focused on manufacturing to reduce its dependency on China.
Data from Counterpoint Research indicates that while Apple iPhones constitute only 6% of India’s 690 million smartphones, this is a notable increase from around 2% in 2019. This growth underscores Apple’s intensified ambitions for the Indian market.
A Proven Strategy for Market Penetration
Nitesh Kripalani, former head of Amazon Prime Video in India, notes that Apple’s strategy is a time-tested method for gaining a strong market presence. In the U.S., Apple has successfully offered Apple Music for free through Verizon’s mobile data plans since 2019 and will soon include Apple TV+ in a Comcast streaming bundle starting in May.
In India, Apple Music will be integrated into Airtel’s Wynk music app, which is set to be phased out. Despite offering an ad-free version to 7 million postpaid Airtel subscribers, Wynk has seen limited engagement. This new initiative aims to change that dynamic.
The Competitive Landscape: Music and Video Streaming
Apple Music, tailored to the Indian market with a mix of Bollywood and regional-language songs, still trails behind Spotify in terms of library size. According to industry sources, Spotify boasts around 3 million paid users in India, while Gaana has 1.4 million, Wynk 500,000, and Apple Music 200,000.
Apple’s entry into the Indian video streaming market has been modest, with an estimated user base of fewer than 1 million. In contrast, Disney+ Hotstar leads with 38 million users, followed by Netflix with approximately 10 million. Despite offering acclaimed original series such as "The Morning Show" and "Slow Horses," Apple TV+ faces stiff competition from rivals featuring more localized Hindi content and regional films.
The Financial Dynamics: A Win-Win Situation
Airtel will pay Apple a per-user fee significantly lower than the monthly $1.20 charged for Apple TV+ and Apple Music in India. This arrangement allows Airtel to cut costs on licensing as it transitions from Wynk to Apple Music, thereby bolstering its revenue and customer loyalty. By focusing on distribution rather than content creation, Airtel aims to leverage its strengths more effectively.
Future Prospects and Market Potential
Airtel plans to offer packages with several months of free access to Apple TV+, aiming to penetrate more Indian households. However, Counterpoint’s Neil Shah cautions that Apple TV+’s growth may be hampered by its limited localization.
Breaking It Down: What This Means for You
Key Takeaways:
- Apple’s Partnership with Airtel: Aims to expand Apple Music and Apple TV+ user bases in India.
- Strategic Market Entry: Builds on Apple’s proven strategy of offering free services through major telecom providers.
- Competitive Landscape: Apple Music and Apple TV+ face stiff competition from local and international players with more extensive libraries and localized content.
- Financial Benefits: Airtel saves on licensing costs and focuses on distribution, while Apple gains market penetration.
How It Affects You:
- Consumers: More access to Apple’s premium music and video content at potentially lower costs.
- Investors: Increased revenue streams and market share for Apple and Airtel could lead to better financial performance.
- Market Dynamics: Enhanced competition may drive innovation and better services in India’s streaming market.
Understanding these dynamics can help you make more informed decisions about your investments and how you consume digital content in India.