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apple It generated record revenue in India in the first quarter of the year, CEO Tim Cook said, pointing to the potential for what could become a key market for the tech giant in terms of iPhone sales and manufacturing.
During Apple’s earnings call Thursday, Cook said Apple set a “record quarterly” for its India business and saw “very strong double-digit year-over-year” growth.
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Apple does not disclose its sales figures in India. In the second quarter of its fiscal year, Apple reported total revenue of $94.84 billion.
Gene Munster, managing partner at Deepwater Asset Management, told CNBC on Thursday that he estimates India accounts for less than 3% of Apple’s total revenue.
Investors have focused on Apple’s potential in India after the tech giant recently bolstered its presence by opening its first physical stores in the country last month.
India’s smartphone market is dominated by low-cost Android phones, such as those offered by samsung And Chinese players like Oppo and Xiaomi. But there is a growing middle class and consumers who are willing to spend more on expensive devices.
Smartphones priced more than $400 now account for 10% of all phone volume shipped versus 4% before the pandemic, according to Counterpoint Research. This category of smartphones accounts for 35% of the total revenue of the smartphone market.
Speaking about the opportunity presented by the India market, Cook said, “There are a lot of people coming into the middle class, and I really feel like India is at a tipping point, and it’s great to be there.”
India is bigger than China in sales?
China has become one of Apple’s largest markets, and the company’s iPhones have been a hit with consumers in the country.
Apple CEO Tim Cook gestures during the opening of Apple’s first retail store in India, in Mumbai on April 18, 2023.
Punit Paranjpe | AFP | Getty Images
Apple’s Greater China business, which includes the mainland, Taiwan and Hong Kong, reported sales of $17.81 billion in the first quarter of the year, down from the same period a year earlier.
Munster of Deepwater Asset Management said that Apple CEO Cook “is laying the groundwork for India to be as big or as big as China.”
“So all your concerns, and my concerns about China, at least on the demand side, are having a lot of success…in India. That’s a big deal because…you have to find big markets to go after, and after a decade, they’re finally starting to achieving traction in India.”
Munster was referring to concerns about a slowdown in China for Apple.
Some still question Apple’s Indian market potential. Richard Windsor, founder of the independent research firm Radio Free Mobile, pointed to the difference in GDP per capita between the two countries, a measure often used as a broad measure of average living standards. China’s per capita GDP is more than 5 times that of India, according to the World Bank.
“So while a lot of Indians would like to buy an iPhone, in terms of the overall numbers, in terms of the numbers you can actually carry in India, it’s probably going to be a lot less than in China,” said Windsor.
However, Apple’s strategy in India goes beyond just selling hardware. The company is also looking to India to become a major manufacturing hub as it looks to reduce its dependence on China.
Apple started assembling its flagship iPhone 14 in India last year — the first time the company has produced its latest device in the country, and it’s so close to its initial launch. Piyush Goyal, India’s commerce and industry minister, said in January that Apple aims to make 25% of all its iPhones in India.
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