Looks like the strategy to launch multiple variants of the iPhone 12 series is helping Apple to strengthen its presence in India. Apple has recently disclosed that response from emerging markets, including India, is quite encouraging.
While announcing the result of Q3 FY21, (Q2 2021) which ended on June 30 2021, Tim Cook, CEO – Apple Inc. (NASDAQ:AAPL), said that Apple witnessed record growth in the June quarter revenue. The Cupertino giant posted revenue of $81.4 billion, up by 36% YoY. He emphasized that the majority of markets, especially the emerging ones like India, performed exceptionally well to attain a double-digit growth in terms of revenue.
Apple is yet to capture a sizeable share of the market in India. Be it smartphones or laptops, the company is still trying to figure out the price point that could make users fall for it in a big number.
Apple India Growth: Big Picture
- Apple has revealed that the response received from India during the June quarter is quite encouraging. The total global revenue growth across their product and services swelled to double-digit in the third quarter of Apple’s fiscal 2021. It’s important to note that Apple’s fiscal year starts from October every year.
- Tim Cook specifically mentioned the iPhone SE, launched a year ago, and is the entry point of Apple’s iPhone range.
- Tim Cook hinted that, unlike iPhone 12 Mini, the company would not discontinue iPhone SE and may launch the successor of the iPhone SE without increasing the price to lure more people towards Apple’s ecosystem.
- Without disclosing any India specific figures, Tim Cook also hinted that Apple’s growth in India is encouraging enough to work towards the direction of making Apple’s product more affordable in the world’s second-largest market by the number of device users.
- While Apple’s revenue includes all products and services, the growth is primarily led by the iPhone which accounts for nearly half of the overall revenue every quarter.
- Apple has shifted the production base of some of the iPhone models to India to reap the benefits of various schemes of the Indian government and to cut down import duties. It has eventually helped Apple to slash the price of iPhone models that are being manufactured in India.
- Apple is expected to double its share in the smartphone market in India. It is estimated that the market share of iPhone would increase to 4% in 2021 from 2% in 2020.
- In June ended quarter Apple reported $21.7 billion in net income which is nearly double – precisely 93% – than the year-ago quarter.
Food For Thought
Apple has been constantly trying to bring iPhone under the reach of as many people as possible in India. Most Apple products in India are available with nearly 20% – 40% price premium compared to the price in the US, thanks to exorbitant import duties. India is among the few countries where import duty is the highest. Quite recently, Elon Musk, CEO – Tesla Inc. (NASDAQ:TSLA), expressed his displeasure about the same.
As the US and China market is heading for saturation, Apple is actively exploring strategies to deep penetrate the market, like India, which has the least penetration level but has a huge potential to grow. It would be interesting to what strategies Apple will employ in the months to come. Will it finally be ready to compromise with its profit margins to slash the price of its products in India or let it remain out of reach of a majority of the population to maintain its brand value? Finding a perfect balance in India is going to be tricky for Tim Cook and Team, for sure.