NEW DELHI: Apple Inc’s India numbers are set for another record, with early trends pointing to about $3 billion (Rs 22,200 crore) in revenue by the end of its ongoing fiscal year in September.This is expected to be a nearly 60% growth year-on-year from the world’s second largest smartphone market, higher than the 29% increase seen last year.
Apple follows an October-September fiscal year.
Despite the projected bumper hike, Apple India’s revenue forms only around 1% of its global figure, with its smartphones having just under 5% market share in India by volume due to their higher price points, analysts said.
“CMR’s early estimates point to Apple’s revenue for the entire year to be $3 billion in India,” Prabhu Ram, head – industry intelligence at CyberMedia Research (CMR) told ET. Corroborating the figures, Navkendar Singh, research director at market research firm IDC said, the year had been strong for Apple in India.
The revenue jump is being backed by strong demand for iPhones, which account for the bulk of the Cupertino-based smartphone maker’s India revenue.
Demand has been high for the Apple iPhone 11, alongside other variants such as 12, XR and SE 2020, according to CMR.
Apple’s contract manufacturers such as Foxconn and Wistron have committed to producing over Rs 3.6 lakh crore worth of mobile phones in the next five years, or 60% of the total committed by global manufacturers under the government’s Production-Linked Incentive (PLI) scheme for handsets.
This indicates that India is set to emerge as an important manufacturing and export hub for the company, rather than only a consumer market, market experts said.
“The company now has a strong product line-up across price tiers; that helps it cater to consumers of all hues – including first-time buyers and those seeking to upgrade to higher price tiers,” Ram said.
Apple did not respond to ET’s emailed queries.
Its CEO Tim Cook has said that the company’s third quarter performance in emerging markets, including India, was incredible and attributed it to offering ‘something for everyone’.
The company posted a 36% year on year increase in revenue at $81.4 billion in the April-June quarter. Net revenue for the nine-month period was $282.4 billion.
CMR estimates that Apple India shipped devices worth $2.9 billion in the first three quarters through June, Ram said.
According to industry experts, actual sales could be close to $2.2 billion till June.
That is because “most industry intelligence firms track the shipments and there could be a lag between the shipments and the sales figures,” said Singh.
Last year through September 30, Apple’s revenue in India jumped 29% to Rs 13,755.8 crore, documents sourced by business intelligence platform Tofler showed.
Market leader Xiaomi clocked revenue of Rs 38,196 crore, while South Korea’s Samsung posted revenue of Rs 78,651 crore. Around 70% of Samsung Electronics’ India revenue, or about Rs 55,000 crore, came from mobile phones.
Xiaomi led the smartphone market by volume, with a 23.9% share in the April-June quarter, ahead of Samsung, which had a 17.7% share, and Vivo (15.1%), Realme (14%) and Oppo (10.4%), data from Counterpoint Research showed.
Apple’s lower share (about 5%) is “understandable” in a market where devices priced under Rs 20,000 make up almost 90%, said IDC’s Singh.
Despite India’s small contribution to revenue, growth in the South Asian market has been finding a mention in Apple’s quarter earnings estimates, underlining its importance to the company.
During an investors’ call, chief executive Cook said the majority of markets the company tracked had shown double-digit growth, with a particularly strong showing in India, Vietnam, and Latin America.
“Considering its aspirational positioning and premium pricing, finding consistent high growth every quarter and year will remain a challenge for Apple in India,” IDC’s Singh said.
India is therefore expected to emerge as a strong manufacturing and export hub rather than a strong sales story for the tech company going forward.
Out of the Rs 6 lakh crore production target allocated over a five-year period for global companies under the marquee PLI scheme, Apple’s contract manufacturers have received an allocation of Rs 3.6 lakh crore, or almost 60%.
According to filings with the government, Wistron has already invested Rs 1,250 crore in the first year, breaching the threshold of Rs 1,000 crore investment over four years. Both Foxconn and Wistron have employed nearly 10,000 people in 2020-21.
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If apple is on the way to meet its PLI linked targets govt should incentivise it more, so that Samsung also shifts more production to India. Similarly GOI should lay out such schemes for EV manufacturers who shift production (initially may be parts or assembly kits only) to india.