India was a key talking point during the call as several analysts asked questions about Apple’s business, strategy, and monetisation trends in India, with some drawing parallels with a similar outlook seen in China a decade ago.
“Looking at the business in India, we did set a quarterly record, grew very strong, double digits year-over-year. So it was quite a good quarter for us. Taking a step back, India is an incredibly exciting market. It’s a major focus for us,” Cook said in response to a question from Morgan Stanley’s Erik Woodring.
Last month, Cook flew down to India to inaugurate Apple’s first two retail stores in the country in Mumbai and New Delhi furthering its India play. Cook met Prime Minister Narendra Modi, along with a host of other ministers, and assured them of Apple’s commitment to India.
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“We’ve got a number of channel partners in the country.. we’re very happy with how that’s going. Overall, I couldn’t be more delighted and excited by the enthusiasm I’m seeing for the brand there. There are a lot of people coming into the middle class, and I really feel that India is at a tipping point, and it’s great to be there,” Cook said during the call.
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iPhone sales growthApple’s growth in iPhone sales and services revenue stood out during the tech giant’s second-quarter results.
While iPhone sales rose 1.5% compared with analyst expectations of a 3.3% decline to $48.9 billion, according to Refinitiv, its services business, which includes products like iCloud and Apple Pay, grew 5.5% to $20.9 billion, in line with analyst expectations.
“We set March quarter records in several developed and emerging markets with India, Indonesia, Turkey, and the UAE doubling on a year-over-year basis. Our active installed base of iPhone grew to a new all-time high and was up in all our geographic segments,” Cook added.
ET reported on April 13 that Apple’s iPhone exports from India surged nearly four times on year to cross $5 billion (more than Rs 40,000 crore) in FY23, as the suppliers of the Cupertino-based company ramped up local production of its premium devices.
Last month, news agency Bloomberg reported that Apple Inc.’s sales in India hit a new high of almost $6 billion in the year through March, highlighting the market’s increasing importance for the iPhone maker as it explores its options to diversify the manufacturing capabilities out of China.
According to the report, revenue in India grew nearly 50% from $4.1 billion a year earlier. This was reflected in the tech firm’s growth in Q2 sales from the rest of Asia Pacific — which includes India — to $8.12 billion mainly on account of a surge in iPhone sales in the region.
Comparison with China & India
Cook was reluctant to compare Apple’s India story with that of China. When asked by Evercore ISI’s Amit Daryanani, he said, “I think each country is different and has its own journey, so I hesitate to compare too much. But what I do see in India is a lot of people entering the middle class, and I’m hopeful that we can convince some number of them to buy an iPhone and we’ll see how that works out. But right now, it’s working out well.”
Apple suppliers have been ramping up manufacturing facilities in India in the recent past.
ET reported on April 19 citing sources that iPhone maker Foxconn is likely to expand its manufacturing facility in India by adding two additional buildings at its site near Chennai. It is also looking to establish a research and development centre in Bengaluru’s Whitefield.
This was after Foxconn chairman Young Liu marked his second visit to India in less than a year in March where he committed to further investments.
“I think there’s an opportunity across the board, including in services. The ARPUs (average revenue per user) are lower in India whether you’re talking about TV and movie streaming or music, the ARPUs are much lower than in other regions. But if you look at it over a long arc of time, I think there’s a good opportunity across the board,” Cook said while responding to a question from Cowen and Company’s Krish Sankar.
