Apple logs double-digit growth in India with aggressive pricing, strategy

2019 witnesses fastest rollout of new iPhones in India

After struggling to grow its handsets business in India during 2018, Apple ended 2019 on a high note. Following record sales in the September quarter, the maker of iPhone, iPad and Macbook put up a robust show during October-December 2019.

Tim Cook, chief executive of the Cupertino-headquartered firm, said in an investor call, “We had double-digit growth in many developed markets, including the US, the UK, France and Singapore. We also grew double-digits in emerging markets, led by strong performances in Brazil, Mainland China, India, Thailand and Turkey.”

Cook, who was addressing investors after the firm’s quarterly results, added that Apple’s iPad business, usually a small segment in markets like India, did well during the last quarter. “For iPad, we saw growth in key emerging markets like Mexico, India, Turkey, Poland, Thailand, Malaysia, the Philippines and Vietnam,” he said.

According to Counterpoint Research’s estimates, in India, Apple was one of the fastest-growing brands during the quarter, driven by multiple price cuts on its iPhone XR model. Localisation of production of new models like the XR helped it bring down price. “Additionally, 2019 saw the fastest rollout of Apple’s new iPhones (11 series) in India, with aggressive pricing and a good channel strategy. In fact, the new series, especially iPhone 11, was introduced at a lower price point than iPhone XR last year. This has helped gain share during the festive season and in its launch quarter in India,” Counterpoint noted.

According to Faisal Kawoosa, lead analyst at TechArc, Apple gained market share further in the last few months as rival Samsung remained busy countering challenges from Chinese players in the overall smartphone market. 

“Apple is estimated to have gained share by two-three percentages to 52-53 per cent in the luxury segment (above Rs 50,000),” he said.

Further, boost in the local business has come from added revenue from its services and accessories divisions as install base for iPhones neared 12 million users. Globally, while Apple registered eight percent rise in iPhone sales in December, revenue from services grew 17 per cent year-on-year (YoY).

After witnessing 47 per cent decline (YoY) in shipment of iPhones in 2018, Apple’s sales continued to falter during the first half of 2019. In 2018-19, its operating revenue dropped 19 per cent to Rs 10,538 crore and net profit plunged 71 per cent to Rs 262 crore from Rs 896 crore. 

Meanwhile, iPhone’s share in the above Rs 30,000 price segment remained between 19 and 21 per cent in the March and June quarters – behind Samsung and OnePlus. 

However, steps taken since April began to pay off from July. From new and competitively-priced iPhones to slashing prices of its older models, it had adopted a multi-pronged strategy. The entry-level new iPhone model in 2019 — iPhone 11 — was priced Rs 64,900, or 15.6 per cent less than the XR variant of 2018. The model was priced even lower than the iPhone X, launched at Rs 70,990 only two years ago.

Also, to capture the country’s shopping mood ahead of the festive season, the new iPhones were made available from September 27 in India, three days ahead of its global launch.