 "Apple posts record quarter in India; Cook says 'incredibly exciting market'")
Technology giant Apple saw its Indian business set a quarterly record as the revenue grew in double digits year-on-year (YoY), said the company as it announced its financial results for the second quarter ended April 1 (its financial year 2023 started in October 2022).
Chief Executive Officer Tim Cook, who presided over the opening of Apple’s first two Indian retail outlets last month, joined his lieutenants in mentioning India roughly 20 times during a conference call with analysts after unveiling earnings. Though the company did not mention Indian revenue in its earnings statements, reports earlier noted that the iPhone maker posted almost $6 billion of sales in the country in the year through March.
“It was quite a good quarter for us. India is an incredibly exciting market. It’s a major focus for us. I was just there, and the dynamism in the market, the vibrancy is unbelievable,” he told analysts. “Over time, we’ve been expanding our operations there to serve more customers, and three years ago, we launched the Apple Store online, and then… we launched two stores just a few weeks ago, and they're off to a great start, one in Mumbai and one in Delhi.”
Cook further noted: “There are a lot of people coming into the middle class and I really feel that India is at a tipping point.”
Although operational in India for 25 years, the company only recently started to expand its retail footprint in the country. The Cupertino-headquartered company led in the over-$500 category or the premium segment last year, with a 60 per cent share. In a first, its iPhone 13 became the third-most shipped handset in 2022.
The record quarterly growth in India, however, comes at a time when Apple witnessed a second consecutive quarter of declining numbers. Nevertheless, the company saw emerging markets doing well for it.
More From This Section
Overall revenue amounted to $94.8 billion in the second quarter, Apple revealed, exceeding the $92.6 billion that, according to a Bloomberg report) analysts predicted. Though the sales fell 2.5 per cent in the period, the company had warned investors to expect a drop of roughly twice that. Quarterly earnings per diluted share at $1.52 remained unchanged YoY.
Cook during the analysts call said: “We were particularly pleased with the performance we saw in emerging markets and achieved all-time records in Mexico, Indonesia, the Philippines, Saudi Arabia, Turkey, and the UAE, as well as a number of March quarter records, including in Brazil, Malaysia and India."
Its India performance comes on the back of impressive growth that the company has seen in the recent past.
Apple’s overall market share for smartphones in 2022 stood at 4.6 per cent, with total shipments coming in at 6.7 million for the year, according to data from IDC, a market intelligence platform. Despite being nowhere near the top five overall — which is occupied by the likes of Xiaomi, Samsung, vivo, realme and OPPO — Apple has been on an incremental path towards cornering a bigger piece of the smartphone pie in India.
The iPhone maker has been the top dog in the premium segment, which is picking up steam due to a decline in entry-level (sub-$150) shipments.
The firm’s premium smartphone shipments ballooned from 1 million in 2018 — when it was behind Samsung and OPPO — to reach 4.7 million in 2021, before touching 6.3 million in 2022, according to IDC.
“We've got a number of channel partners in the country (India) as well that we're partnering with, and we're very happy with how that's going overall,” Cook said.
“I am hopeful that we can convince some number of them to buy an iPhone and we'll see how that works out. But right now, it's working out well,” the 62-year-old said.
The tech giant has also recently made inroads into the Indian market by way of refurbished devices. Data from Counterpoint Research, a technology market research firm, signposts an 11 per cent share for refurbished iPhones in 2022, up from 3 per cent the previous year.
Besides smartphones, the tech giant broke into India’s top five personal computer companies’ ranking for the first time in the fourth quarter of CY22.
Experts that Business Standard spoke to said that although the first quarter of CY23 may have seen the shipments slide for Apple, the firm can increase its market share from the current fifth position to fourth by the end of this year. Apple’s presence in the PC (including laptops and desktops) segment in India is skewed towards MacBooks.
Until 2020, according to IDC data, Apple’s PC shipments averaged around 30,000-50,000 per quarter. During the festival season sales (July-October last year), Apple’s PC shipments went up to 300,000 for the first time.
Two changes have made Apple increase its sales in India.
One, with component costs going up, the difference between an Apple MacBook and other brands has narrowed. Two, Apple is making inroads into the enterprise segment, which has been the stronghold of PC manufacturers like Dell and Lenovo.
The wearables segment has, however, not fared as well for the company. In terms of the smartwatch market, Apple slipped from a 14 per cent market share in 2019 to a mere 2 per cent in 2022.
Cook, however, sees a bigger opportunity than just hardware sales. During the earnings call, he claimed that India provided an opportunity, across the board, not just for its devices, but also for TV and movie streaming, and music, despite the Average Revenue Per User (ARPU) being much lower compared to other regions. “But if you look at it over a long arc of time, I think there's a good opportunity across the board,” he added.