ET OnlineNEW DELHI: Apple Chief Executive Officer Tim Cook will be in India later today, this is his first trip to the country since taking over from the late Steve Jobs in 2011.
Full Coverage: Apple CEO Tim Cook's maiden visit to India
India was a lone bright spot as Apple reported its first quarterly sales decline in 13 years. Cook expects things to get even better once high-speed 4G networks gain traction across the country. While global iPhone sales fell for the first time, they rose 56% in India in the January-March quarter from the year earlier.
Also Read: Apple CEO Tim Cook to arrive in India today; set to meet PM Narendra Modi this week
“The thing that (has) held not only us back, perhaps but some others as well, is that the LTE rollout in India just really began this year, and so we’ll begin to see some really good networks coming on in India,” Cook said at a conference call after Apple’s second-quarter earnings announcement. “That will unleash the power and capability of the iPhone in a way that an older network, a 2.5G, or even some 3G networks, would not do.”
India’s top telcos Bharti Airtel, Vodafone India and Idea Cellular are extending 4G networks across the country ahead of the commercial launch of such services by Reliance Jio Infocomm. The optimism on India contrasts with prospects elsewhere. Revenue in China and the Asia-Pacific region took a hit, with Apple forecasting another disappointing quarter.
Read also: Tim Cook lands in Mumbai tonight to kick off India trip
While India is the third largest smartphone market, right now it’s where China was at about seven to 10 years back and hence offers great opportunity, Cook said.
China is currently Apple’s second-largest market after the US. The company is focused on attracting first-time users in emerging markets like India as sales show signs of tapering in developed ones.
“On emerging markets, if you take a look at India, we grew by 56%, and we-’re placing increasing emphasis in these areas, where it’s clear there will be disproportionate growth versus the more developed areas,” said Cook.
The Apple boss said the company has accelerated expansion in India in the last 18 months, including widening retail reach to smaller shops. “I am encouraged by the results that we’re beginning to see there, and believe there’s a lot, lot more there,” Cook said. The company has also applied for permission to set up its wholly owned stores in the country.
Incidentally, Apple recently decided to restore parity in pricing by reducing online discounts that had annoyed brick-and-mortar stores, several of which had slashed their iPhone stock. Apple’s distribution reach in India has doubled in the last two years with four distributors versus two earlier, industry executives said.
Counterpoint Research said iPhone sales in the January-March period in India hit a record 630,000 units and the market tracker now forecasts they will rise to 3 million in the calendar year, compared with just over 2 million in 2015. “However, most of the growth was driven by the iPhone 5s, which contributed to almost half of the total sales,” said Tarun Pathak, senior analyst at Counterpoint Research.
“Being a price-conscious market, Apple’s priority in India is to sell more iPhones and not necessarily new iPhones. As a result, its overall average sale price declined year-on-year.”
Gartner India research director Vishal Tripathi said Apple’s growth in the country is largely attributable to brand pull among young consumers aided by installment and buyback schemes, besides the company’s increased retail expansion. “We expect Apple’s India revenues to continue grow in double digits,” he said.
In the quarter ended March, Apple had 3% of the smartphone market by volume and 11% by value, Counterpoint data said. Apple ranked behind the competition in terms of volume, where Samsung, Micromax and Lenovo lead, according to initial estimates.
That may change over the coming quarters as Apple increases its focus on the Indian market, experts said. But as Cook pointed out, the company will be hoping increased 4G adoption will encourage Indians to buy more of Apple’s newest models, they said.
(With ET Bureau inputs)
Full Coverage: Apple CEO Tim Cook's maiden visit to India
Jobs never considered India a significant market for the company’s iconic products, but for Tim Cook this is the country Apple cannot afford to ignore.
India was a lone bright spot as Apple reported its first quarterly sales decline in 13 years. Cook expects things to get even better once high-speed 4G networks gain traction across the country. While global iPhone sales fell for the first time, they rose 56% in India in the January-March quarter from the year earlier.
Also Read: Apple CEO Tim Cook to arrive in India today; set to meet PM Narendra Modi this week
“The thing that (has) held not only us back, perhaps but some others as well, is that the LTE rollout in India just really began this year, and so we’ll begin to see some really good networks coming on in India,” Cook said at a conference call after Apple’s second-quarter earnings announcement. “That will unleash the power and capability of the iPhone in a way that an older network, a 2.5G, or even some 3G networks, would not do.”
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India’s top telcos Bharti Airtel, Vodafone India and Idea Cellular are extending 4G networks across the country ahead of the commercial launch of such services by Reliance Jio Infocomm. The optimism on India contrasts with prospects elsewhere. Revenue in China and the Asia-Pacific region took a hit, with Apple forecasting another disappointing quarter.
Read also: Tim Cook lands in Mumbai tonight to kick off India trip
While India is the third largest smartphone market, right now it’s where China was at about seven to 10 years back and hence offers great opportunity, Cook said.
China is currently Apple’s second-largest market after the US. The company is focused on attracting first-time users in emerging markets like India as sales show signs of tapering in developed ones.
“On emerging markets, if you take a look at India, we grew by 56%, and we-’re placing increasing emphasis in these areas, where it’s clear there will be disproportionate growth versus the more developed areas,” said Cook.
The Apple boss said the company has accelerated expansion in India in the last 18 months, including widening retail reach to smaller shops. “I am encouraged by the results that we’re beginning to see there, and believe there’s a lot, lot more there,” Cook said. The company has also applied for permission to set up its wholly owned stores in the country.
Incidentally, Apple recently decided to restore parity in pricing by reducing online discounts that had annoyed brick-and-mortar stores, several of which had slashed their iPhone stock. Apple’s distribution reach in India has doubled in the last two years with four distributors versus two earlier, industry executives said.
Counterpoint Research said iPhone sales in the January-March period in India hit a record 630,000 units and the market tracker now forecasts they will rise to 3 million in the calendar year, compared with just over 2 million in 2015. “However, most of the growth was driven by the iPhone 5s, which contributed to almost half of the total sales,” said Tarun Pathak, senior analyst at Counterpoint Research.
“Being a price-conscious market, Apple’s priority in India is to sell more iPhones and not necessarily new iPhones. As a result, its overall average sale price declined year-on-year.”
Gartner India research director Vishal Tripathi said Apple’s growth in the country is largely attributable to brand pull among young consumers aided by installment and buyback schemes, besides the company’s increased retail expansion. “We expect Apple’s India revenues to continue grow in double digits,” he said.
In the quarter ended March, Apple had 3% of the smartphone market by volume and 11% by value, Counterpoint data said. Apple ranked behind the competition in terms of volume, where Samsung, Micromax and Lenovo lead, according to initial estimates.
That may change over the coming quarters as Apple increases its focus on the Indian market, experts said. But as Cook pointed out, the company will be hoping increased 4G adoption will encourage Indians to buy more of Apple’s newest models, they said.
(With ET Bureau inputs)
( Originally published on May 17, 2016 )
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