Chennai-based IT and life style product supplier Redington has said that the weak demand for Apple iPhone products in India has impacted the third quarter performance of the company badly. Redington is one of the distributors of Apple Inc products in India. The company said that it would wait for Apple to announce its going-forward plans to revive the dwindling iPhone sales in India. It hopes that some of the ‘corrections’ should take place this quarter. Redington India managing director Raj Shankar said at an analyst conference call that during the third quarter, unfortunately, in spite of huge expectations, both the iPhone 8 and the iPhone 8 Plus, as well as the iPhone X, did not fire the way all of the stakeholders had anticipated. “So, while there was a huge expectation, somewhere it just fizzled out, which then resulted in us not being able to scale our business and hence, when you compare our performance in Q3 FY2018 with Q3 FY2017, it certainly shows a big decline,” he said.

The standalone net profit of Redington India has declined 12.13% to Rs 45.69 crore in the quarter ended December 2017 as against Rs 52 crore during the same quarter in the previous fiscal. Similarly, sales of the company too dropped 5.83% to Rs 4,012.81 crore against Rs 4,261.24 crore. When asked about the fact that Apple itself cut the production targets for the iPhone X, and how he saw the Apple portfolio for the next calendar year, Shankar said if a company like Apple would have cut production for the iPhone X, it is a clear demonstration of the fact that the product, in their own expectation, has not done as well. In terms of allocation, he said he thinks it should ease up, but the problem was not about the allocation. “I think the iPhone X has, in terms of price, made only a very few buyers afford this product and we did not see the kind of demand that all of us were hoping for, in spite of the fact that it has one of the best iOS ever. But, there are lots of rumours around what Apple is planning to do, so we will wait for them to announce their going-forward plans and we are hoping some of those corrections should take place this quarter,” he said.

Replying to another question, Shankar said the iPhone SE being produced locally has not seen significant scale. “ So, we continue to be looking at the rest of these SKUs, which are not manufactured locally,” he said. The mobility vertical — mobile phones — currently contributes about 30% to the company’s revenues. Besides Apple, it has Samsung and Google Pixel in its portfolio. On the reported move by Flipkart to float its own logistic arm and its possible impact on ProConnect, the subsidiary of Redington, he said the e-commerce contribution is about 14% of overall ProConnect business. “We are engaged with all e-commerce players. This business has been scaling up nicely for us, so even though some of these companies would have their own logistics capability, what we have observed is there are specific regions and there are specific markets where they do not have that same level of capability, and therefore they want to tie up with someone who can provide or render that logistic services in that market.Also, the nature of our services with most of these e-commerce companies has different aspects as it is not just managing their fulfillment centre, but all about taking it end -to-end,” he said.