A large queue outside the newly opened retail store in Mumbai on Tuesday sums up Apple’s 25-year-long journey in India really well. Analysts attribute the US tech giant’s success mainly to its ‘aspirational’ brand image and said the same will help it gain market share in the smartphone segment going forward as well.
While Apple has been in India for long, it achieved significant growth after the announcement of production-linked incentive (PLI) scheme for smartphone manufacturing in 2020, according to analysts. Owing to incentives under PLI, Apple’s contract manufacturers – Wistron, Foxconn and Pegatron – started local assembly of iPhones.
“India is a hugely exciting market for us and a major focus. We are putting a lot of emphasis on the market. There’s been a lot going from financing options and trade-ins to make products more affordable and give people more options to buy,” Apple CEO Tim Cook had said in February.
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Based on the growth levers, analysts expect the company’s market share to increase to around 6% in 2023 in India, factoring in the affects of global headwinds and boost from opening of stores in two of its bigger consumer markets — Delhi and Mumbai — in India .
The move for local manufacturing and strong demand for premium products have not only increased Apple’s smartphone market share in India to 5% but also helped it clock record shipments of 6.5 million, according to market analyst firms Counterpoint and IDC.
“Apple is a premium brand. While many people love to have an iPhone but still hesitate to buy one owing to easy compatibility with Android. Timing for Apple to open its retail stores in India is apt in order to give an experience of its portfolio of devices to users and gain market share,” said Navkendar Singh, associate vice-president at IDC.
With regard to the growth of Apple’s iPhone in the smartphone market over the last five years, the company had a less than 1% market share with shipments below 1 million in 2018. The market share grew to over 1% in 2019, 2% in 2020 and over 4% in 2021.
Apple’s shipments grew to around 6 million in 2021 from 1.5 million in 2019, according to estimates from Counterpoint, IDC and Cybermedia Research.
In fact, in the October-December quarter of 2020, Apple crossed 1 million shipments of iPhones in India for the first time. The reasons for a strong growth over the years can be attributed to the successful launches of its premium smartphones. For example, in 2020, the company launched iPhone SE, which was a huge success and local manufacturing further aided its growth.
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“Brand loyalty of Apple is high and there is a great demand for iPhone in the refurbished market as well,” said Shilpi Jain, research analyst, Counterpoint. “Despite starting local manufacturing, Apple maintained its premium image and did not lower the product pricing but introduced lucrative offers like discounts during festivals, financing schemes, etc,” Jain added.
In the over $500 (Rs 40,000) bracket, Apple plays in the premium segment. In India, this segment accounts for 7% of the market and witnessed the highest growth of 55% in 2022, according to Singh.
While in the overall smartphone market segment, Apple might have a 5% share, it has a 41% slice in the premium bracket as of 2022 end, according to Counterpoint, which also suggests that the company had close to 25% market share in the premium segment in 2019.
In India, Apple contract partners manufacture iPhone 11, 12, 13 and 14 models. According to industry estimates and media reports, Apple’s sales from India rose nearly 45% to $6 billion in FY23, hitting a record high. Its exports from India are estimated to have crossed over $5 billion (`40,000 crore) in the last financial year ended March 2023.
In the October-December quarter last year, Apple achieved a record double-digit growth in its quarterly revenue in India. It witnessed growth across all its product segments and factors such as multiple financing options are expected to have led the growth of premium smarphones like iPhone in India, according to analysts.
