Apple iPhone sales dropped as much as 22 per cent in January-March quarter in India even as the company saw record overall sales in the country driven by higher MacBook uptake.
According to CyberMedia Research, Apple sold only 5,85,004 iPhones in India in the quarter, compared with 7,52,544 in the same quarter last year, a 22 per cent decline. Revenues, however, grew marginally.
“Apple is continuing to increase its threshold price and that will squeeze the opportunity for Apple in India. iPhone X was a steep jump in iPhone prices, clearly impacting iPhone volumes in India,” said Faisal Kawoosa, head, new initiatives, CMR.
Average price of iPhones sold in India has consistently been up in the last one year. While it stood at $617 in April-June quarter last year, it rose to $658 in July-September quarter, going up further to $756 in October-December, 2017 to an all time high of $763 in the January-March quarter, 2018. Apple sells phones ranging from ₹20,000 to ₹1 lakh in India. However, the cheaper iPhones are as much as more than four-years-old and, therefore, the uptake has been waning for such phones.
During an analyst call on Tuesday, Apple CEO Tim Cook acknowledged the company’s low marketshare in India, which stood around 2-3 per cent of overall mobile sales in India. Cook also said that the company is planning to put greater energy into the region to accelerate growth.
“India is the third largest smartphone market in the world. There’s obviously huge opportunities there for us, and we have extremely low share in that market overall. And so we’re putting a lot of energy there and working with the carriers in that market, and they’re investing enormously on the LTE networks. And the infrastructure has come quite a ways since we began to put a lot of energy in there because of their leadership and so forth,” Cook said.
“Apple’s overall India revenues have been growing but that’s not because of increase in iPhone sales, its purely because they are selling more expensive iPhone including the iPhone X, which costs 40 percent more than previous generation phones,” said Kawoosa
The sales of Apple iPhones further dampened after Finance Minister Arun Jaitley announced an increase in the Customs duty on phones to 20 per cent from 15 per cent. This applies only to phones that are not assembled in India such as the iPhones. Apple was forced to increase prices of iPhones to 3.6 per cent and up to 8.3 per cent in prices of Apple Watch models. The official pricing of the iPhone SE remains unchanged as it was assembled in India.
Sale of Macs
Cook said that it was a record first half (October-March) for Apple in India. But that’s not because of iPhone sales but Macs, which have come out as an underdog in Apple’s India portfolio.
“We sold 4.1 million Macs, generating year-over-year growth in many emerging markets, including Latin America, the Middle East and Africa, Central and Eastern Europe and India. We were happy to see double digit growth in our active installed base of Macs to a new all-time high, with almost 60 per cent of March quarter purchases coming from customers who are new to Mac,” Cook said.
Since July last year, Apple has been running aggressive marketing campaigns, offering interest-free EMIs on MacBooks and heavy discounts on entry-level MacBooks on e-commerce portals. This, combined with an attached aspirational value with the Apple brand in India, has helped MacBook sales to grow.
But now Apple is eyeing more products and service headed towards India. “We continue to put great energy there and try to – our objective over time is to go in there with all of our different initiatives from retail and everything else. And so we’re working toward those things. It’s a huge market and it’s clear that many people will be moving into the middle-class over time, as we’ve seen in other countries,” Cook said.