Apple clocks double-digit revenue growth in India

Analysts tracking Apple said the India results were glimpses of what the company could achieve in emerging markets with a right pricing strategy for its products and local manufacturing.

Apple, the global information technology major, has recorded double-digit growth in revenue in India over the last year.

Also, its growth in the country bounced back in the company’s fiscal 2019 third quarter (Q3; its accounting year begins October 1), said chief executive Tim Cook.

“India bounced back during the quarter. We returned to growth there. We are very happy. We grew in Brazil as well,” said Cook on Wednesday.

On a geographic basis, the US-based giant saw marked improvement in its year-on-year (YoY) comparisons from emerging markets, relative to the first half of this financial year.

Particularly in the BRIC (Brazil, India, Russia, China) countries, where YoY performance went from a 25 per cent revenue decline in the first half to 3 per cent growth in the June quarter.

Cook said the firm set June quarter revenue records in several major developed markets - America, Canada, Germany, France, Japan, Australia, Korea.

“In emerging markets, we returned to growth in mainland China, grew strong double-digits in India and in Brazil, and set new Q3 records in Thailand, Vietnam, and the Philippines,” said Cook.

Analysts tracking Apple said the India results were glimpses of what the company could achieve in emerging markets with a right pricing strategy for its products and local manufacturing.

Apple iPhone shipments fell 11 per cent in the quarter globally; in India, these grew 19 per cent (YoY), according to Counterpoint Research.

“The iPhone XR was their leading model in terms of shipment in Q2, as compared to the iPhone 6 last year. This is comparatively a new series of iPhone and became one of the top models for Apple.

"The key reason why it happened is that they slashed prices in the middle of the quarter, which helped sales to grow,” said Tarun Pathak, associate director, Counterpoint.

“That indicates that if Apple gets the pricing right in a market like India, there is always demand for an iPhone, as it is a very aspirational brand in the country.

"This is a little glimpse of what they can achieve in India if they can get the pricing right,” said Pathak.

India is one of the most sought destinations for smartphone firms, with as many mobile users as the entire population of America.

The number of smartphone users in India is expected to double to 859 million by 2022 from 468 million in 2017, growing at a compound annual growth rate of 12.9 per cent, according to an Assocham-PwC joint study.

It is already the world’s second-largest market for smartphones, after China. About 134 million units were sold across India in 2017.

“OnePlus remains the number one brand in India in the premium segment, driven by the strong initial response of the OnePlus 7 series.

"But, overall, the competition is set in the premium segment. Beside OnePlus, you have brands Oppo, Google and Huawei,” said Pathak.

“The good thing these brands have done is that they have expanded the category, and all of them have the possibility to grow and co-exist. I think the opportunity is big for Apple in India.” he said.

Apple posted quarterly revenue of $ 53.8 billion, an increase of 1 per cent from the year-before period.

Quarterly earnings per diluted share was $ 2.18, down seven per cent. International sales accounted for 59 per cent of the quarter’s revenue.

“This was our biggest June quarter ever. Driven by all-time record revenue from services, accelerating growth from wearables, strong performance from iPad and Mac, and significant improvement in iPhone trends,” said Cook.

“These results are promising across all our geographic segments and we’re confident about what’s ahead.

"The balance of calendar 2019 will be an exciting period, with major launches on all of our platforms, new services and several new products.”

“Our year-over-year business performance improved compared to the March quarter and drove strong operating cash flow of $ 11.6 billion,” said Luca Maestri, chief financial officer.

“We returned over $ 21 billion to shareholders during the quarter, including $ 17 billion through open market repurchases of almost 88 million Apple shares, and $3.6 billion in dividends and equivalents.”

Apple also provided a forecast for its fiscal 2019 fourth quarter, where it expects revenue of $ 61-64 billion.

Photograph: Ally Song/Reuters