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Chief executive Tim Cook continued to sound bullish about the Indian market. “We see an extraordinary market—a lot of people moving into the middle class; distribution is getting better, lots of positives. We put two retail stores there; they’re doing better than we anticipated. It’s still early going, but they’re off to a good start, and I couldn’t be happier with how things are going at the moment,” Cook said.

Since the March quarter of 2022, Cook has mentioned India in every earnings announcement. Since then, Apple has opened its retail stores in Mumbai and Delhi and has been making iPhones in India in line with global timelines and exporting them.

“We had an all-time revenue record in India. We grew very strong double-digits. It’s an incredibly exciting market for us and a major focus of ours. We have a low share in a large market, so it would seem there’s a lot of headroom there. The ASPs (average selling prices of smartphones), I haven’t looked at them most recently, but I’m sure that they’re lower than worldwide. But that doesn’t bother us at all,” he said.

The steady growth could help Apple top the smartphone market revenue chart in India and approach $10 billion in annual revenue by the end of this year, analysts said.

Tarun Pathak, research director at market researcher Counterpoint India, said that Apple hit a 6% market share in the country in the September quarter and may maintain it through 2023. Data shared with Mint by Counterpoint said that Apple’s market share of smartphones was 1% in 2019, which grew to 2% in 2020 and 4% at the end of 2022.

“The ‘premiumization of the market’ has begun in the world’s second-largest smartphone market, and Apple has gotten the timing right on peaking at the right time. It is catalyzing this trend in its favour—through its broad iPhone portfolio and financing offers,” Pathak said.

Pathak, as well as Navkendar Singh, associate vice-president at market researcher IDC India, expect Apple to ship over 9 million iPhones in India by the end of this year, a growth of more than 50% over the previous year. Prabhu Ram, head of market researcher CMR’s industry intelligence unit, said that Apple’s shipments grew 44% year-on-year in the September quarter, giving it a 54% market share in smartphones priced above ₹50,000.

On 30 October, Mint reported that Apple is nearing $10 billion in annual revenue from India. Its India financials, filed with the ministry of corporate affairs on 28 October, reported a 48% annual revenue growth to $5.9 billion in FY23. Retailers and industry analysts told Mint at the time that Apple had seen good demand despite a tepid smartphone market. IDC’s Singh said that Apple “has had a great festive quarter”, which is expected to bolster its overall performance in India.

Singh added that Apple led the overall smartphone market in terms of India’s smartphone revenue share in the first six months, and given that it has since had a strong September quarter, there’s a good chance that it could beat Samsung to capture the top spot this year. Samsung, to be sure, ships far more devices than Apple in India—in 2022, it shipped 26.1 million smartphones in the country, in comparison with Apple’s 6.5 million iPhones, according to Counterpoint data.

While Apple’s immediate growth potential looks strong, analysts and retailers both believe this could slow. “At some point in the near future, Apple will hit the ceiling, given that the market for premium phones is only about one-fifth of the overall market. Apple can only sell so many $1,000 phones in the long run, and at this point, the room for exponential growth will run out,” IDC’s Singh said.

Manish Khatri, partner at Mumbai-based retailer Mahesh Telecom, said that Apple’s mainstay for growth would be to offer its one- or two-year-old flagship phones at around the ₹50,000 price point. “The iPhone SE never sold well despite being priced less because people didn’t want such a basic feature set, and it felt like a compromise. If Apple can offer older flagships here at a $600 ( ₹50,000) price point, this could be key to sustaining growth among Indian buyers for a longer period,” Khatri said.

Meanwhile, Apple reported a 1% year-on-year revenue decline to $89.5 billion in the September quarter but said its services revenue set an all-time record with double-digit growth “ahead of expectations.” However, Cook expressed caution in his commentary on the ongoing business environment.

“We continue to face an uneven macroeconomic environment, including foreign exchange headwinds… We’ve continued to invest in the future and manage for the long term. We’ve adapted continuously to circumstances beyond our control while being thoughtful and deliberate on spending,” he added.

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Updated: 03 Nov 2023, 11:16 PM IST