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Apple Saw Double-Digit Growth In India, Says Tim Cook In Earnings Call

Apple Saw Double-Digit Growth In India, Says Tim Cook In Earnings Call

Apple had strong growth in India after a slow previous quarter

The company recently ramped up manufacturing of iPhones in India

International revenue made up 59% of Apple's quarterly revenue of $53.8 Bn

Apple has tried it all to gain market share in India, and a healthy stream of revenue from its Indian users. And then last year, it did what many experts had urged it to for a long time. It started making iPhones in India, which allowed it to price them more competitively. In fact, Apple ramped up production to such an extent, that even its high-end iPhone X is now made in India. Manufacturing in India is part of Apple’s plans to set up a retail presence in the country as well. And looks like all those efforts have paid off well in the past quarter for the Cupertino giant.

Apple’s India business grew in Q3 which ended June 29 in the US, bucking the trend of tough sales climate, fewer iPhones sales in other markets. “In emerging markets, we returned to growth in mainland China, grew strong double digits in India and in Brazil, and we set new Q3 records in Thailand, Vietnam and the Philippines,” Apple CEO Tim Cook said at the earnings call.

Apple is taking on the likes of Xiaomi, BBK’s OPPO, Vivo and OnePlus, as well Samsung in the premium segment, and this is the only segment that Apple has a presence in as it has continued to go for a high-margin approach in the price-sensitive Indian market. But this strategy seems to have paid off in Q3. “On the market side, we have emerging markets where we have low penetration and during the quarter tactically, the emerging markets had a bit of a rebound. In fact, on a constant currency basis, we actually grew slightly in emerging markets. We still declined on a reported basis. India bounced back during the quarter, we returned to growth there. We’re very happy with that,” Cook added.

Overall, Apple posted quarterly revenue of $53.8 Bn, a 1% increase Y-o-Y, where international sales accounted for 59% of the quarterly revenue.

“This was our biggest June quarter ever — driven by all-time record revenue from services, accelerating growth from wearables, strong performance from iPad and Mac and significant improvement in iPhone trends.” – Tim Cook

Apple’s India Fortunes

An estimate by Canalys says Apple’s iPhone shipments to India declined by more than 75% in Q1 2019. Globally as well, iPhone shipments fell 23% on the back of global smartphone slowdown. A large part of this is due to the relatively higher market price of iPhones in India, compared to other premium smartphone brands such as Samsung, Huawei and OnePlus.

By moving a lot of its manufacturing capacity to India, Apple is looking to effectively reduce the price of iPhones by availing the Make-in-India manufacturing subsidies. At the moment, 20% duty on the full price of a unit is levied on every iPhone shipped from the US or China to India. Setting up a local manufacturing unit is one of the mandatory conditions in the government’s local sourcing policy for single-brand retail stores.

Apple’s longtime manufacturing partner Foxconn has expanded its India base and is also running quality tests for the iPhone XR model in India, with mass production for the device planned soon.

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