Apple’s CEO, Tim Cook, announced during the company’s earnings call on Thursday that the tech giant had achieved a quarterly revenue record in India in the first quarter of the year. Cook highlighted the potential of India as a crucial market for both iPhone sales and manufacturing. He stated that the company had seen “very strong, double digits year-over-year” growth in India.
Apple does not reveal its sales data for India. However, in the second quarter of its fiscal year, Apple announced total revenue of $94.84 billion. According to Gene Munster, managing partner at Deepwater Asset Management, India is estimated to contribute to just under 3% of Apple’s total revenue.
Apple’s recent expansion in India with the opening of its first physical stores has drawn attention from investors who are optimistic about the tech giant’s potential in the country. Despite India’s smartphone market being dominated by low-cost Android phones from brands like Samsung, Oppo and Xiaomi, there is a growing middle class with a willingness to spend more on high-end devices.
Counterpoint Research reports that smartphones priced over $400 now make up 10% of the total volumes of handsets shipped, up from 4% before the pandemic. These high-end smartphones represent 35% of total smartphone market revenue. Tim Cook highlighted the potential of the Indian market during Apple’s earnings call, noting that there is a growing middle class and an opportunity for iPhone sales and manufacturing in the country. He added that he believes India is at a tipping point and that it’s exciting for Apple to be there.
Apple has had a lot of success in China, where its iPhones are popular with consumers. However, with India’s population expected to overtake China’s, and with similar economic growth dynamics, Apple is optimistic about the potential for growth in the Indian market.
Apple reported a decline in sales in Greater China, which includes the mainland, Taiwan and Hong Kong, in the first quarter of the year, with sales totaling $17.81 billion. However, CEO Tim Cook remains optimistic about the potential for growth in India, with Munster of Deepwater Asset Management suggesting that Cook is paving the way for India to become a market that is as big as or even bigger than China.
Munster of Deepwater Asset Management stated that concerns about a slowdown in China for Apple are being alleviated by the company’s success in India. He added that finding large markets to pursue is crucial and that after a decade of trying, Apple is finally gaining traction in India.
There are skeptics about the potential of the Indian market for Apple, including Richard Windsor, founder of independent research firm Radio Free Mobile. He highlighted the difference in gross domestic product (GDP) per capita between the two countries, which is often used as a measure of average living standards. According to the World Bank, China’s GDP per capita is more than five times larger than India’s.
According to Richard Windsor, founder of independent research firm Radio Free Mobile, while many Indians may want to buy iPhones, the number of people who can actually afford them is likely to be significantly lower than in China due to the difference in gross domestic product per capita between the two countries. China’s GDP per capita is more than five times the size of India’s, according to the World Bank. Nonetheless, Apple’s plans in India go beyond just selling hardware as it seeks to establish India as a crucial manufacturing center to reduce its dependence on China.
Last year, Apple started manufacturing its flagship iPhone 14 in India, marking the first time that the company has produced its latest device so close to its initial launch in the country. According to Piyush Goyal, India’s minister of commerce and industry, Apple is aiming to manufacture 25% of all of its iPhones in India. This move is part of Apple’s strategy to reduce its dependence on China as a manufacturing hub.