Apple witnessed double-digit revenue growth in India in September quarter: CEO Tim Cook

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Apple witnessed a strong double-digit revenue growth in emerging markets like India for the September-ended quarter, chief executive Tim Cook said during the company's earnings conference call on October 27.

Apple's chief financial officer Luca Maestri said that India set a new all-time revenue record in terms of iPhone sales during the quarter, without disclosing any specific information.

Apple is currently among the leading players in the country's premium smartphone market (above Rs 30,000) in India and remained the top-selling brand in the ultra-premium segment (above Rs 45,000) in the country, according to the market research firm Counterpoint Research.

It said Apple currently has a 37% share in the premium smartphone market and a 3% market share in the country's overall smartphone market.

“India is among the 20+ countries in the world where the premiumization trend has just started. Easy finance, buy now pay later, and shift from mid-tier to premium is happening” said Tarun Pathak, research director at Counterpoint Research.

"Though the premium smartphone market is only 7% now in India of the total smartphone market but it is likely to hit 10% next year in 2023 and is growing much faster (+14%) than the overall smartphone market (7%)" he added.

Apple shipped 1 million iPhones in the country in Q2 2022, registering a 63% year-on-year (YoY) growth, according to the market research firm.

Apple shipped over six million iPhone units to India in 2021, more than double the three million shipped in 2020, due to aggressive growth of its offline presence and improved manufacturing capabilities in the nation, as per Counterpoint. This is despite India becoming one of the most expensive locations where the iPhone is sold across the world.

Last month, Apple announced that it has started manufacturing the iPhone 14 in India, in a move that could provide a huge boost to the country's ambitions to become a global manufacturing hub.

This development came just weeks after the device was unveiled on September 7 and is part of Apple's strategy to diversify its manufacturing capabilities beyond China amid rising geopolitical tensions between the two countries. The Cupertino tech giant's supply chain was also disrupted for months as a result of China's strict Covid-19 measures over the past year.

Also Read: Apple iPhone 14 will be made in India but here's why it is unlikely to get cheaper

While Apple has been manufacturing iPhones in India since 2017, it was primarily making older generation handsets through partners such as Foxconn, Wistron, and Pegatron with a lag of around six to nine months from its Chinese facilities. Apart from iPhone 14, the company currently makes iPhone SE, iPhone 12, and iPhone 13 in the country.

According to a recent JPMorgan report, Apple may move 5 percent of its global iPhone 14 production to India by late 2022 and later expand its capacity to make one out of every four iPhones in India by 2025.

Global performance

Overall, Apple's iPhone business saw net sales grow by 10 percent YoY to $42.6 billion for the quarter ended September 24, 2022. Maestri said this was despite significant foreign exchange headwinds during the quarter.

Sales from its Mac business grew by 25% YoY to $11.5 billion, benefiting from the launch of the new MacBook Air and MacBook Pro. iPad sales however declined 13% YoY to $7.2 billion.

Wearables, home and accessories revenue was at $9.7 billion, registering a 10% YoT growth, driven by the launch of Apple Watch and new AirPods Pro.

Sales from its services business, which includes App Store, cloud services, music, video, advertising, and payment services, saw a 5% YoY increase to $19.2 billion. Maestri said a few services were impacted by macroeconomic headwinds, including foreign exchange. "Digital advertising and gaming are areas where we've seen some softness," he said.

Apple now claims to have over 900 million paid subscriptions across various services on its platform, adding more than 155 million subscribers in the past year. Earlier this week, Apple hiked the prices of its music service Apple Music and video streaming service Apple TV+ in the United States.