As Apple hits another revenue record in India, CEO Tim Cook says the iPhone maker is pragmatically making smartphones in India to become competitive.
As Apple ramps up production in India amidst growing tensions between China and the United States, Cook characterised Apple’s focus on making in India as pragmatic.
“I see it as an incredibly exciting market and it’s a major focus for us. In terms of the operational side or supply chain side, we are producing there, from a pragmatic point of view, you need to produce there to be competitive,” Cook said in a post-earnings conference call.
Analysts predict that Apple will make a quarter of its iPhones in India by the end of the year. Last year, Ming-Chi Kuo of TF International Securities said that Apple, contingent on favourable conditions, will elevate its India-made iPhone shipments to constitute 20% to 25% of its global total by next year.
However, it is still to be noted that India’s subsidy policies, which are attracting global brands like Apple to make their devices in India, still have s their detractors. Even as the number of Made-in-India iPhones baloons, local value addition for these phones is still pretty low, in the early teens, going by some estimates. In the lead up to the general elections, India Cellular and Electronics Association, a proxy lobbying body for Apple has initiated meetings to further reduce import duties on components, which will ultimately reduce any incentive for to truly localise the supply chain in India, besides the final assembly of the mobile device.
Revenue performance
Apple’s quarterly revenue in India hit another record as the iPhone maker posted strong double-digit growth in the world’s second-largest smartphone market. “We did grow strong double-digit. And so we were very, very pleased about it. It was a new March quarter revenue record for us,” Cook says.
“And so yes, there the two things are linked from that point of view. But we have both operational things going on and we have go-to-market, and initiatives going on. We just opened a couple of stores as last year, as you know, and we see enormous opportunity there. We’re continuing to expand our channels, and also working on the developer ecosystem as well,” says Cook.
“We’ve been very pleased that there is a rapidly-growing base of developers there. And so, we’re working all of the entire ecosystem from developer to the market to operations, the whole thing. And I just could not be more excited and enthusiastic about it,” he adds.
Apple announced financial results for its fiscal 2024 second quarter ended March 2024. The company posted quarterly revenue of $90.8 billion, down 4% year over year, and quarterly earnings per diluted share of $1.53.
“During the quarter, we were thrilled to launch Apple Vision Pro and to show the world the potential that spatial computing unlocks. We’re also looking forward to an exciting product announcement next week and an incredible Worldwide Developers Conference next month. As always, we are focused on providing the very best products and services for our customers, and doing so while living up to the core values that drive us,” says Cook.
“We’re working with partners in India and the U.S. to replenish 100% of the water we use in places that need it most with the goal of delivering billions of gallons of water benefits over the next two decades,” said Cook.
In 2023, according to Counterpoint Research, Apple sold 10 million smartphone units in India, which amounts to less than 10 per cent of smartphone sales done in India that year. However, Apple topped all brands when it came to revenue.
Tarun Pathak, Research Director at Counterpoint, told businessline, “In India, revenues grew to record levels due to better product mix and channel expansion. We believe apple will continue to grow faster than the market and might grow over 20% in 2024. This is where the premium market has doubled in just two years and Apple has been the big beneficiary with its market share also tripling from 2% level before the pandemic to more than 6 per cent at the end of 2023 in terms of volume share. So, Apple has timed it right to expand its retail footprint in such a potential market where it can not only sell millions of iPhones every year but also manufacture them here and also cross-sell other Apple devices, services bringing them into the Apple ecosystem with a top-notch retail experience.”