The performance of Apple in India was above the mark considering the fact that globally, Apple iPhone sales fell 16 percent to 51.2 million iPhones in the second quarter compared to 61.2 million in the year-ago quarter.
Apple said the installed base of iPhone globally increased by 80 percent today versus two years ago. The iPhone 6s upgrade rate is slightly higher than the iPhone 5s but lower than the iPhone 6.
Apple bets on 4G
Apple CEO noted that the rollout of 4G in India just began this year. “We’ll begin to see some really good networks coming on in India. That will unleash the power and capability of the iPhone in a way that an older network, a 2.5G or even some 3G networks, would not do,” Timothy Cook said.
Telecom operators such as Bharti Airtel, Idea Cellular and Vodafone have 4G networks in select pockets of India. Reliance Jio Infocomm is expected to launch 4G this year.
India is already the third largest smartphone market in the world. Because the smartphones that are working in India are low end, primarily because of the network and the economics, the market potential has not been as great there. “I view India as where China was maybe seven to ten years ago from that point of view, and I think there’s a really great opportunity there,” Timothy Cook said.
Apple sales declined 11 percent in Mainland China. Apple opened seven stores in China during the second quarter. Apple has 35 stores in China. The company will open five more this quarter to achieve 40. Apple sales will be driven by the growth in 4G networks in China.
Apple’s Timothy Cook said: “We remain very optimistic about the China market over the long term, and we are committed to investing there for the long run.”
Apple will not recover in the third quarter as well going by the company’s forecast of 15-19 percent decline in sales.
The technology major says the weak revenue guidance is due to a reduction in channel inventory worth over $2 billion and limited supply of iPhone SE, the latest smartphone to land in India this month. Apple expects iPhone ASPs to decline sequentially.