Apple's partnership with India's second-largest telecom provider is set to give the iPhone maker a crucial edge in a competitive landscape where it currently lags behind industry giants such as Spotify and Walt Disney.

The American technology leader seeks to boost its global service revenue from applications, payments, and media by providing complimentary music and video streaming to a large segment of Bharti Airtel's 281 million subscribers.

This collaboration is anticipated to significantly expand the user base for Apple TV+ and Apple Music in a country where Apple has mainly concentrated on manufacturing to reduce its supply chain dependency on China.

While Apple assembles a substantial number of its iPhones in India, its devices represent only 6% of the nation's 690 million smartphones, an increase from about 2% in 2019, as reported by Counterpoint Research.

"This initiative showcases Apple's ambitions for the Indian market," stated Nitesh Kripalani, the former head of Amazon Prime Video in India. "This strategy is a well-established method to strengthen market presence in key regions."

In the United States, Apple has offered Apple Music for free through select Verizon mobile data plans since 2019, and its Apple TV+ will be included in a Comcast streaming bundle starting in May.

In India, Apple Music will be available to premium users of Airtel's Wynk music app, which is expected to be discontinued.

Postpaid Airtel contracts provide around 7 million subscribers with access to the ad-free Wynk version, although only a small fraction actively engages with it, according to a telecom industry source who requested anonymity due to the sensitive nature of the information.

Neither Apple nor Airtel has commented on inquiries made outside of regular business hours.

MUSIC BATTLEGROUND

According to Neil Shah, co-founder of Counterpoint, Apple Music is better suited for the Indian market compared to the predominantly English-language Apple TV+, featuring a selection of Bollywood and regional-language tracks. However, its catalog is smaller than that of Spotify.

In India, Spotify boasts approximately 3 million paid subscribers, while Gaana has 1.4 million, Wynk has 500,000, and Apple Music has around 200,000, as reported by an anonymous source from the Indian music industry who was not permitted to disclose these figures publicly. Neither Spotify nor Gaana provided comments outside of regular business hours.

Data from the industry group FICCI and consultants EY indicates that only about 7.5 million individuals subscribed to audio streaming services in India last year, out of a total of approximately 185 million users of both ad-supported and ad-free applications.

An industry source revealed that Airtel will pay Apple a per-user fee that is "significantly" lower than the $1.20 monthly charge for Apple TV+ and Apple Music in India.

This arrangement will allow Airtel to save millions in licensing fees as it plans to discontinue Wynk and leverage Apple Music to enhance revenue and customer loyalty.

"Airtel recognized that its strength lies in distribution rather than content creation," stated the source, who requested anonymity due to restrictions on discussing the issue.

VIDEO STREAMING

Apple holds a minor position in the Indian video streaming market, with Counterpoint estimating its user base at under 1 million. In contrast, Disney+ Hotstar leads the market with 38 million users, while Netflix is estimated to have around 10 million subscribers.

Netflix has indicated its ambition to reach 100 million users, although it has not provided a specific timeline for this goal. Apple TV+ is recognized for its original programming, including series like "The Morning Show" and "Slow Horses."

However, competitors such as Netflix and Disney offer a wider array of Hindi content featuring Bollywood stars, as well as films in various regional languages.

Additionally, Disney and Reliance Industries' JioCinema provide live cricket streaming, which is immensely popular in India, and the two companies are in the process of merging their media assets to form the largest entertainment entity in the country.

Airtel, the second-largest telecom provider after Reliance Jio, intends to offer packages that include several months of complimentary access to Apple TV+, according to a second telecom source.

While this initiative may increase Apple TV+'s presence in households, growth may be limited due to its current offerings not being fully tailored to the local market, as noted by Counterpoint's Shah.