Apple Inc. has achieved a milestone in India, with its annual sales reaching a record of almost $8 billion. This shows the rapid growth of the Indian market, where the tech giant is now assembling more of its devices and operating two flagship stores.
According to the source, Apple’s revenue in India saw a substantial jump of about 33% in the 12 months ending in March, up from $6 billion a year earlier. The company’s expensive iPhones accounted for more than half of these sales, said the source, who requested anonymity as the information is not publicly disclosed.
This increase highlights the steady progress Apple is making in winning over consumers in the world’s most populous country. As India’s economy grows, its consumers are gaining more purchasing power. Apple is targeting this market to diversify its manufacturing and revenue sources beyond the much larger Chinese market, which has become more uncertain due to trade tensions with the US.
In response to this positive news, Apple’s stock gained as much as 2.2% in premarket trading in New York on Monday, reaching $235.59.
While Apple does not break out its India revenue in its earnings reports, it is required to report annual sales to local authorities. Apple representatives in India did not respond to requests for comment.
The Indian market is currently dominated by cheaper Chinese devices that use Google’s Android mobile operating system. iPhones represent only about 3.5% of the approximately 690 million smartphones in use in India, according to Counterpoint Research. Despite this, India is one of Apple’s fastest-growing markets, though it accounts for only about 2% of Apple’s latest fiscal-year sales of $383 billion.
Apple CEO Tim Cook is determined to change that. He visited India last year to open the country’s first two Apple Stores, which sell iPhones, iPads, MacBook computers, and other devices and accessories. The expanding middle class in India, which views Apple products as status symbols, could help the company gradually reduce its reliance on sales from China.
In China, Apple’s revenue shrank to $72.6 billion in the latest fiscal year due to economic cooling, though iPhone sales have rebounded recently thanks to heavy discounting by retailers. However, ongoing US-China tensions have prompted Apple and other global tech firms to look towards India as the next major growth market.
Apple has been rapidly expanding its manufacturing operations in India. Currently, it produces models including the latest iPhone 15 in the country, though not the higher-spec Pro and Pro Max models. Most of the devices assembled in India are exported.
Apple’s India-based assembly partners doubled production to $14 billion worth of iPhones in the country last fiscal year, according to previous reports by Bloomberg News. This means Apple now produces up to 14% of its flagship devices in India.
On an earnings call in May, Tim Cook emphasized the importance of the Indian market for Apple. “I see it as an incredibly exciting market and it’s a major focus for us,” he said.
| Fiscal Year | Annual Sales (in billions) |
|---|---|
| 2022 | $6 |
| 2023 | $8 |
Apple’s strategic focus on India is part of its broader effort to diversify its revenue and manufacturing base. The company’s move to open flagship stores in Mumbai and Delhi is a testament to its commitment to this market. These stores offer a full range of Apple products, enhancing the brand’s visibility and accessibility in India.
India’s middle class is growing, and with it, the demand for premium products like those offered by Apple. The company’s focus on this demographic is evident in its marketing strategies and the range of products available in the Indian market. Apple’s products are often seen as status symbols, which aligns well with the aspirations of India’s burgeoning middle class.
Apple’s decision to manufacture a significant portion of its devices in India is a strategic one. This move not only helps mitigate risks associated with over-reliance on China but also aligns with India’s ‘Make in India’ initiative, which encourages local manufacturing.
By producing devices locally, Apple can better manage its supply chain and potentially reduce costs. This is particularly important given the competitive nature of the Indian market, where price sensitivity is high. Local production also allows Apple to respond more quickly to market demands and changes.
Apple’s prospects in India look promising. The company’s focus on expanding its presence in the country, both in terms of retail outlets and manufacturing facilities, positions it well to capitalize on the growing market. As India’s economy continues to grow and more consumers gain purchasing power, Apple is likely to see further increases in its sales.
The ongoing trade tensions between the US and China may drive more global tech companies to look to India as a safer and more stable market for growth. Apple’s early and aggressive investment in the Indian market could give it a significant competitive advantage in the years to come.
Apple’s record sales in India mark a significant milestone for the company. With a strategic focus on expanding its presence and increasing local production, Apple is well-positioned to tap into the potential of one of the world’s fastest-growing markets. As the company continues to innovate and adapt to the unique demands of the Indian market, its success in the region is likely to continue growing.
Featured Image courtesy of Pixabay