Apple CEO Tim Cook has admitted that India, and other emerging phone markets, has helped the iPhone maker to sell more smartphones and avoid a significant drop in business.
Apple’s total revenue fell 3 percent to $94.8 billion in Q1 2023. Apple’s iPhone business revenue rose 1.5 percent to $51.3 billion during the first quarter.
Apple is trying to make inroads to India wherein Android smartphone makers such as Samsung, Vivo, Oppo, Xiaomi and Realme are the leaders in the India smartphone market in the first quarter of 2023, according to IDC report.
Tim Cook is betting that emerging markets like India will provide more opportunities for growth, with their youthful populations and relatively few iPhones, Reuters news report said.
Global smartphone shipments fell 13 percent in January to March, according to research firm Canalys, whose data showed Apple gained market share from Android phones.
The total size of the India smartphone market was 31 million as the market contracted by 16 percent in the first quarter. India’s 5G smartphone share increased to 45 percent in Q1 2023 from 31 percent in Q1 2022, led by Samsung which accounted for more than a quarter of the 5G smartphone shipments. Apple does not feature in top five position in India.
Apple said it set sales records in several countries across South Asia, Latin America and the Middle East.
“We’re putting efforts in a number of these markets and really see, particularly given our low share and the dynamics of the demographics, a great opportunity for us in those markets,” Tim Cook told investors during a conference call.
Apple recently opened its first two retail stores in India — in Mumbai and Delhi. While Apple does not disclose revenue for the country, Tim Cook told investors that it set a quarterly record and percentage growth was in very strong double digits year-over-year.
“There are a lot of people coming into the middle class, and I really feel that India is at a tipping point, and it’s great to be there,” Tim Cook said on the conference call.
Apple was the second biggest revenue generating brand in India in 2022, second only to Samsung as it gained 18 percent of the total value of smartphone shipments, according to research firm Counterpoint.
For Apple, selling an iPhone in an emerging market represents more than just the sale of one device – it represents the chance to get consumers hooked on Apple devices and services over time. Customers who start with an iPhone might later add an Apple Watch or AirPods or sign up for subscription services.
Tim Cook said he saw opportunities for Apple in India in services but said that average revenue per user – a metric known as ARPU in the subscription business – would take time to catch up to Apple’s other markets.
Part of the reason that Apple has been able to gain market share in both emerging and developed markets is the emergence of a booming market for used iPhones.
Sales of refurbished iPhones rose 16 percent in volume globally during 2022. India led the growth with a 19 percent jump, according to Counterpoint, with iPhones accounting for 11 percent of secondary smartphone sales in India.
Apple will be in a better to position to grab more share from Android smartphone makers because 5G network is growing across India offering high-speed mobile data. 5G market leaders in India are Airtel and Reliance Jio. They are offering high-speed 5G at the rate of 4G to attract more customers to buy 5G phones and use more data.