Apple CEO Tim Cook considers India’s growth ‘very good’

Apple CEO Tim Cook considers India’s growth ‘very good’

India is no longer an unfocused market for Apple. At the time when the global sales of the iPhone grew marginally, CEO Tim Cook says that India’s growth “is very good.”

With all its marketing and sales efforts, Apple sold 74.8 million iPhones worldwide in the quarter ended December 2015, up just 0.4 percent from the year-ago quarter. This resulted in the slowest growth since the launch of the first iPhone model in 2007.

However, India emerged as one of the key markets for the iPhone maker as its sales grew 76 percent.

“India’s growth, as you know, is very good. It’s quickly becoming the fastest growing BRIC country. It’s the third largest smartphone market in the world, behind China and the US,” Cook said in an earnings call.

Apple CEO Tim Cook on India's growth

Apple CEO Tim Cook targets India as one of the key markets for its iPhones

Apple is seeking to invest more in India to mark growth in the coming future. This comes as a contrary move after facing hardships in China and many developed regions, including some major parts of the US and European markets.

India is one of the high fertility fields for many smartphone makers. Emerging companies like Xiaomi and OnePlus had received huge response from the Indian market in the recent past. And now, Apple is taking the advantage of the young population in the country to expand its business.

Continues to be an aspirational brand

Analysts believe that Apple continues to be an “aspirational brand” in India, despite its slow growth in the developed regions. “India smartphone market is on a growth spurt since 2014 and Apple continues to be an aspirational brand in India,” says Nitish Pande, research analyst, Counterpoint Technology Research.

“Growth of LTE services, increasing base of smartphones, increased disposable income and young consumers willing to enter Apple ecosystem are some of the indicators for growth of Apple in India.”

Apple does not have more than one percent share in the total smartphone market in India. But Pande mentions that the shipments of 0.8 million units of the iPhone models during the fourth quarter of 2015 were the “highest ever” in the country.

One of the prime reasons behind the small market share is the less presence across offline and online channels. The Cupertino giant knows this very well. Thus, it recently filed an application to the government authorities to open Apple Stores in the Indian market.

Apple Stores in India

Get ready to experience Apple Stores live in India

Apart from merely widening distribution reach, marketing campaigns targeting at the young audience in the market have already been started through electronic, print and web channels. These are aimed to encourage Indian youth to buy new iPhone models.

“Going forward we estimate Apple to scale aggressively and thus reaching to consumer beyond Metro and Tier 1 cities,” Pande concludes.

Threat for other players

Apple is indeed improving its position in the Indian market. This could be a threat for many domestic and Chinese companies that recently entered the market with their offerings that are claimed to be competing against the iPhone.

Recently, a drop in the iPhone 5s price, which was appeared to be an informal outcome of market disequilibrium, countered the sales of many mid-range Android smartphones. These include some of the most popular ones in the market, such as the LG Nexus 5X and OnePlus 2 among others.

That being said, Apple is yet to address some currency issues to gain in the market where rupee stands against dollar. The iPhone maker also has a large number of rivals in the market that offer similar technologies at lower prices.

Categories: Analysis