The iPhone is Apple’s ‘showstopper’ product, and once again, it is back on track making money for Cupertino.
Cupertino major Apple on Thursday said it doubled its business in India last quarter and even though its market share remained quite low relative to the size of the opportunity, it felt good about the trajectory it was taking in the world’s second largest smartphone market. During the company’s fiscal first quarter earnings call, CEO Tim Cook once again stressed how its India online store had helped Apple achieve ‘great’ results—and revealed how it planned to increase its market share in India going forward by setting up physical retail stores.
“India is one of those (markets), where our share is quite low, it did improve from the year ago quarter, our business roughly doubled over that period of time, so we feel very good about the trajectory,” Cook said. “We are doing a number of things in the area, we put the online store there for example, and last quarter was the full first quarter of the online store and that has gotten a great reaction to it and has helped us achieve the results that we got to last quarter. We are also going in there with retail stores in the future and so we look to that to be another great initiative, and we continue to develop the channel as well,” he added.
Cook had confirmed last year that the company will open its first offline retail outlet in India in 2021. Although he did not share a timeline so to say, multiple reports have suggested it could be sometime during the third quarter. Apple currently employs third-party resellers to sell its products in India. Once up and running, Apple’s offline retail outlet will become an extension to its India online store that made its debut on September 23, 2020. So far, this online store is Apple’s only ‘direct’ retail presence in India and numbers seem to suggest it is off to a great start. Having its own offline store would not only help Apple do things its own way—the way that Apple likes to—it could also help Cupertino double down on its efforts to expand in India—from both reach and sales point of view.
Apple has been planning to do this for some time now, though it was only after the government’s decision to ease the 30 per cent local-sourcing norms for single-brand retailers in 2019, that road became somewhat clearer. Welcoming the move, Cook had said, “We appreciate the support and hard work by Prime Minister Narendra Modi and his team to make this possible and we look forward to one day welcoming customers to India’s first Apple retail store.”
The iPhone is Apple’s ‘showstopper’ product, and once again, it is back on track making money for Cupertino. Apple’s revenue crossed $100 billion for the first time in its history during the final calendar quarter of 2020 and a historic holiday season, up 21 percent year over year, with iPhone sales reaching an all-time high of $65.6 billion. The previous best was $61.58 billion, which Apple achieved in fiscal Q1, 2018. The iPhone 12 is ‘expectedly’ doing well, giving due credence to the idea of a ‘super-cycle’ event wherein more and more people are now willing—and wanting—to upgrade from older iPhones so they could use newer, more future-proof technology like 5G.
Over the last few years, Apple has ramped up its efforts to make the iPhone—particularly the low-cost iPhones—in India and while the move does not necessarily guarantee lowering of prices, making more iPhones in India would serve another important cause. It would reduce Apple’s long reliance on China. There are reports that Apple is planning to start making the iPhone 12 series in India as soon as this quarter. Hopefully, a reduction in prices would follow. But regardless, Apple today sells a ‘diverse’ set of iPhones across price points giving buyers more options to choose from, so there is at least one ‘new’ iPhone for everyone.
There is no doubt that India is an important frontier for Apple, a great opportunity as Cook said, and it would be interesting to see how things pan out in the days to come.