Apple's new retail stores in India beating expectations, says CEO Tim Cook

Apple hit a revenue record in India with "strong double digits" growth in the recently-concluded June quarter

Apple CEO Tim Cook on August 3 said that India is a 'huge opportunity' for the company and they are putting all of their energies in growing their business here, as the country becomes increasingly important for the iPhone maker's future growth.

"It is the second largest smartphone market in the world. So, we ought to be doing really well there. We still have a very, very modest and low share in the smartphone market (in India)" Cook said during the company's earnings conference call.

Cook's comments come after Apple posted its third straight quarter of revenue decline on a yearly basis and predicted a similar performance in the ongoing quarter.

For the quarter ended June 30, Apple's revenue dipped 1 percent year-on-year (YoY) to $81.8 billion, pulled down by a 2.4 percent YoY decline in iPhone sales that came in at $39.7 billion for the quarter. Apple follows an October to September financial year.

Cook's statements however come on the back of Apple's significant retail expansion in the country earlier this year. He visited India in April after nearly seven years to launch two retail outlets both in Mumbai and Delhi.

During the call, Cook said that while these stores are still in their early days, they are currently beating the company's expectations for how well they are performing.

"We continue to work on building out the channel and putting more investment in our direct-to-consumer offers as well" he said.

Apple is benefiting from the growing premiumisation trend among Indian consumers, which has resulted in the company clocking record revenue growth in terms of iPhone sales in the country in recent quarters. Apple's India sales have reportedly jumped to nearly $6 billion in FY23 from $4 billion in FY22.

Cook said on the earnings conference call that the company hit a revenue record in India with "strong double digits" growth in the recently-concluded June quarter, without disclosing any specific information.

Also Read: Apple BKC store opens in Mumbai, signaling the iPhone maker's growing India ambitions

India has emerged as one of Apple’s top five markets, according to market research firm Counterpoint Research. The company clocked a 56 percent YoY growth in the April-June quarter and currently leads the country's ultra-premium smartphone market (above Rs 45,000) with a 59 percent share, it said.

In 2022, the iPhone maker clocked record shipments of over 6.5 million devices, registering a 16 percent YoY growth. That said, the company's overall market share in the country's smartphone market is still modest, at an estimated 6 percent.

Apple is betting on India to become a key manufacturing hub in order to diversify its manufacturing capabilities beyond China

Apple's Make in India push

Apple is also betting on India to become a key manufacturing hub in order to diversify its manufacturing capabilities beyond China, thanks in part to incentives provided by the government through its production-linked incentive (PLI) scheme for smartphones.

The company currently manufactures iPhones in India, including the latest iPhone 14, through contract manufacturers such as Foxconn, Wistron, and Pegatron, with plans to expand into other products such as its wireless headphones AirPods.

Apple clocked iPhone exports of about $5 billion-$5.5 billion from India in FY23, accounting for nearly half of the country's mobile phone exports, as per industry estimates.

Foxconn is also planning to start manufacturing iPhone units by April 2024 at its Devanahalli plant in Bengaluru rural district, Moneycontrol reported in June 2023. It aims to make 20 million devices per year through this facility.