“Apple topped the smartphone revenue chart in India in the first six months, and has also had a very strong two months festive season sales. Due to this, there is strong probability Apple could pip Samsung to the top spot in smartphone revenue in India,” said Navkendar Singh, associate vice-president for client devices , International Data Corp. (IDC) India.
According to IDC, the company closed 2022 with shipments of 6.5 million iPhone units to retailers. A consensus of industry analysts suggests that in 2023, Apple is likely to exceed 9 million iPhone shipments with some even estimating 9.5 million units.
However, this is significantly lower than Samsung’s 26.1 million units in 2022, which helped the Korean electronics major lead the revenue charts for smartphone sales in India. According to Counterpoint and IDC analysts, Samsung’s average selling price (ASP) is around $350, while Apple’s ASP for iPhones around $1,000.
Retailers were of the same view. The head of a Kolkata-based multi-brand retail chain, claiming to be a “preferred retail inventory partner” of Apple, said iPhone sales have been “stronger than expected this year”.
“In the past three years, Apple is increasingly doing better every year. For most years, nearly 80% iPhone sales through festive period is driven by older generation models. This year, the share of iPhone 15 sales, launched in September, were 50% higher than iPhone 14 sales over this period in 2022, hinting at consistently strong demand for Apple’s products in this period.”
The retailer spoke on the condition of anonymity as he is not authorized to comment on Apple’s sales performance.
All signs indicate to a promising future for Apple in India. Its sales have been steadily increasing, and at almost three times the average price of a phone sold in India. With a relatively small user base, industry insiders believe there is ample room for growth. However, challenges remain.
According to a Mint analysis, the company’s India and global earnings figures showed even after a near-48% rise in revenue growth in FY23 from the year ago, Apple India’s contribution to global revenue in the April 2022-March 2023 period was a mere 1.5%. Apple India’s earnings were at $5.9 billion, compared with its global revenue of $385.1 billion during this period.
Apple India’s share in overall earnings grew by 50 basis points since FY22, primarily due to a very low base. Its India revenue growth of 48% far outpaced its 0.2% revenue dip during this period.
A clear example for this can be seen in Apple’s ‘services’ revenue—the company earned $354 million from services in India in FY23, a paltry 0.4% of its $80.5 billion in services revenue globally, during this corresponding period.
According to experts, this could pose serious challenges in the long run. “There will be a point in near future when Apple will hit the ceiling. The premium phones market is about 20% of the overall market. Apple can only sell so many $1,000 phones in the long run. At some point, the room for exponential growth will run out,” Singh said.
So, despite robust growth over the past three years, India’s contribution to Apple’s overall revenue may remain muted at best. “India’s significance for Apple is of a fresh market, plus geopolitical diversification of its supply chain. But, the revenue ceiling could be a challenge for Apple to break through,” Singh added.
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To address this, analysts as well as retailers believe that Apple may need to revise its pricing strategy for the Indian market.
Signs of this were evident in the recently concluded festive sales in late September-early October.
“There was strong demand for the iPhone, especially with online sellers, who offered iPhone 14 at as low as ₹59,000. Offline sellers did not have such heavy discounts to offer, but if Apple can offer its two years-old flagship devices at this price point, this can pose a strong challenge to sales of other flagship devices such as Samsung’s,” said Manish Khatri, partner and Mumbai-based retailer and distributor, Mahesh Telecom.
However, to get a larger market share from Samsung and OnePlus, a stripped-down experience such as Apple’s mid-range iPhone SE may not suffice. “The iPhone SE never sold well despite its pricing purely because of the feature set. If Apple can offer older flagship here for a $600 ( ₹50,000) price point, it may hold key,” Khatri added.
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Updated: 30 Oct 2023, 11:23 PM IST