Apple Reports Double-Digit Growth In India In Q1, Tim Cook ‘Very Bullish’ On The Country

Apple announced its Q1 2023 results on February 2 (Thursday), reporting revenue of $117.2 Bn for the December quarter. CEO Tim Cook indicated that despite significant foreign exchange headwinds, supply constraints on iPhone 14 Pro and iPhone 14 Pro Max, and a challenging macroeconomic environment, markets like Canada, Indonesia, Mexico, Spain, Turkey, Vietnam, Brazil, and India did significantly well.

During the earnings call, the Apple CEO shared his optimism towards the Indian market and highlighted areas wherein India set a record for sales during the quarter under review. This include all-time high iPhone revenue, double-digit growth in the installed base of active iPhones, and continued adoption of services for businesses like Apple Business Essentials, AppleCare, Tap to Pay, and Apple Financial Services.

“We actually did fairly well through COVID in India. And I’m even more bullish now on the other side of it, or hopefully, on the other side of it. And that’s the reason why we’re investing there. I’m very bullish on India,” he said.

Apple: Recent Developments In The Indian Market

Here are some of the key developments Apple has seen recently in the Indian market:

• December 2022
  • Apple looks to diversify its production units outside China, making India a likely contender to become a major manufacturing hub for the company
  • Tata subsidiary Infiniti Retail will become an Apple franchisee, setting up outlets of 500 sq ft – 600 sq ft in malls, high-end streets and posh neighbourhoods.
• January 2023
  • Union Minister Piyush Goyal announced that Apple is aiming to increase the share of its production in India to 25% of its total production from the current 5%-7%
  • Announced 12 job roles including technical specialist, business expert, senior manager, store leader and ‘genius’ as Apple is likely to unveil two stores in Mumbai’s Bandra-Kurla Complex and Delhi’s Saket within week.
  • Apple’s key supplier Jabil Inc started manufacturing AirPods components in India and meanwhile, began shipping AirPods’ enclosures or plastic bodies to China and Vietnam.
  • Apple’s 14 Chinese suppliers received initial approval from the Indian government to set up assembly plants in the country.

India Is An Exciting Market: Tim Cook

As the Apple CEO indicated, India is hugely exciting market for the company and is a major focus.

“We brought the online store there [India] in 2020. We will soon bring Apple retail there. So we’re putting a lot of emphasis on the market. There’s been a lot done from a financing options and trade-ins to make products more affordable and give people more options to buy,” he said.

He also compared the Indian market with China and shared that a similar scaling strategy is being followed by Apple here.

“We are, in essence, taking what we learned in China years ago and how we scale to China and bringing that to bear. And I don’t have the exact market shares in front of me, but I think you would see that from a market share point of view that we grew around the world last quarter despite — on iPhone despite the challenges that we’ve had on the supply side. And I wouldn’t expect to have a difference in those two markets,” added Apple CEO.

Earlier in January this year, it was reported that Apple exported more than $2.5 Bn worth of iPhones from India during April-December 2022, nearly double the exports in the entire financial year 2021-22 (FY22), highlighting the rapid shift in its production to outside China.

According to a recent report by brokerage JP Morgan, Apple may manufacture one out of four iPhones in India by 2025. The production shift will not be limited to iPhones, as around 25% of all Apple products, including Mac, iPad, Apple Watch and AirPods, are expected to be manufactured outside China by 2025.