Apple’s iPhone Shipments To India Drop To 220K Units In Q1 FY19

Apple’s iPhone shipments to India have dropped to 220K units in the first quarter of FY19, according to an Asian industry analytics firm Counterpoint.  The research has estimated that total shipments could grow by three times in the next three months. However, the full year shipments were estimated between 1.5 Mn to 1.6 Mn, which is 10-17% less than that in 2018.

Globally, Apple’s shipments have dropped by 20% year-on-year in Q1 FY19, which has also reflected in the 8% YoY dip for the global premium smartphones’ segment.

Counterpoint attributed this drop in shipments to users holding on to their iPhones for longer, with average replacement cycle for iPhones being over three years. Another attributing factor is said to be the rise of competing smartphone companies such as Samsung and OnePlus. 

Specifically in India, the premium smartphone segment (greater than or equal to INR 30K) was dominated by Samsung in Q1 FY19, while the country’s reigning leader in this segment, OnePlus came in at the second spot. 

Together, Samsung, OnePlus and Apple accounted for 90% of the premium segment shipments in Q1 FY19. Apple had held only 1.2% share in the Indian smartphone market till December 2018.

Apple Eyes India’s Booming Smartphone Market 

Recently in May, Apple’s CEO Tim Cook said that India is a very important market in the long term for Apple, even if it is a challenging market currently. “We have started manufacturing there, which is very important to be able to serve the market in a reasonable way. And we’re growing that capability there. And we would like to place retail stores there. And we’re working with the government to seek approval to do that,” he added.

This was closely followed by reports of Apple shortlisting locations in Mumbai to set up the first Apple Store in India. 

Earlier in April 2019, Apple has started manufacturing iPhone 7 model in India, in addition to iPhone SE and iPhone 6s. In the same month, Apple was reported to have partnered with Foxconn Technology Group to begin the mass production of iPhone X in India. 

Foxconn was said to initially invest about $300 Mn to set up manufacturing for Apple with investments to ramp up as capacity expands.

Earlier in 2018, Apple had reportedly requested an exemption from duty on manufacturing and repair units, as well as components, capital equipment and consumables for smartphone manufacturing. At the time, Prabhu had said that the government will look into Apple’s requests.

The company has sought tax concessions for years, especially on India’s condition on tax breaks, that 30% of the smartphone be manufactured through local sourcing of components.

Smartphone users in India are projected to reach 829 Mn by 2022 as the country is currently the world’s fastest-growing smartphone market with 23% CAGR.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.