Apple’s iPhone 16 rings record-breaking expectation in India for festive quarter

Apple Inc.’s new lineup of smartphones drew lukewarm reactions from its shareholders but in India the company’s artificial intelligence-powered iPhone 16 has rung in anticipation of a record quarter.

Analysts and retailersMint spoke with expect Apple to register up to a 20% boost in iPhone sales in India in the next three months as retailers unleash discounts and product launches to celebrate the country’s peak festive season.

This, in turn, could help Apple close in on the $15-billion revenue milestone in India in 2024-25, driven by consumer thirst for the benchmark-setting company’s latest AI offerings, a natural consumer upgrade cycle, better pricing, and more affordable instalment plans.

Sales of iPhones, despite their premium pricing, or because of it, have been rising exponentially in India the past five years—from around $1.5 billion in 2020-21 to $7.5 billion in 2023-24. Apple’s overall India revenue in 2023-24 jumped to over $8 billion from $4.8 billion in the year before.

Over the next three months, Apple could sell up to 3.3 million units of its iPhones in India, an 18% year-on-year increase, as per consensus estimates of four top market analysts surveyed by Mint.

Apple’s overall revenue in India, including iPhone sales, is projected to rise even faster—up to $3 billion in the December quarter, up 30% from a year earlier, with the average selling price of iPhones tipped to increase by 5-8%. That would make for an annual increase of nearly 30% in Apple’s quarterly revenue from iPhones sold in India.

“This year marks a natural upgrade cycle for consumers, after 2020 and 2021 being the last calendar years when most users bought new smartphones," said Navkendar Singh, associate vice-president at market researcher International Data Corporation, India.

“With iPhones largely seeing a usage cycle of 3-4 years, Apple is anyway tipped to see stronger buyer interest this year. This can help the company cement a market share of nearly 8% in India, at over three times the average price per smartphone in the rest of the industry."

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And yet, Apple investors in its home market, the US, however, were underwhelmed by the company’s over-reliance on AI for its new phones. Some quarters also expected a price hike globally but reacted negatively to Apple holding on to its pricing.

Apple’s shares fell 1.1% on Nasdaq through its annual event on Monday (in the US), and declined a further 0.5% in pre-market hours on Tuesday. But several brokerages including JP Morgan have retained a ‘buy’ rating on the stock in anticipation of the market impact when the new devices go on sale later this month.

A price surprise

The average selling price of iPhones is expected to touch ₹75,000, up from ₹69,000 a year ago, driven by demand for Apple’s AI offering in the base model of the iPhone 16, as well as a hefty discount on its latest flagship, the iPhone 16 Pro.

As against an introductory price of ₹134,900 for the iPhone 15 Pro launched in September last year, Apple has priced its iPhone 16 Pro in India at ₹119,900.

The new pricing, which takes advantage of import duty reduction on imported devices, also suggests that localization of the production of Apple’s latest ‘Pro’ phones are expected to commence soon, experts said.

All of this could add up to a record quarter, and, in turn, a record fiscal year, for Apple India.

Each of the four analysts Mint spoke with said that thanks to the upcoming festive quarter, Apple could end up selling up to 13 million iPhones in India this fiscal year, generating upward of $11.5 billion in revenue from one of its fastest-growing markets.

iPhones account for nearly 90% of Apple’s India revenue, with the Mac line of personal computers the next closest contributor at around $1 billion.

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“The brick-and-mortar retail market is also seeing increased push from distributors this year, and offline retail is expected to match e-commerce firms in terms of offers and promotions," said Tarun Pathak, research director at market researcher Counterpoint India.

“All of this spells good for Apple, since because of the natural upgrade cycle, more users will prefer opting for the latest-generation iPhone 16 instead of the older models," he added. “Access to easy affordability and sure-to-be-offered festive season promos will further help Apple’s case here."

To be sure, Apple’s iPhone 16 launch comes shortly after Google’s launch of its new AI-heavy phones. Samsung is also expected to launch its next generation of AI phones at the start of the new year.

Yet, the October-December quarter is expected to be generally one of the best periods for all phone brands, Singh and Pathak said, adding that the cyclical upgrade cycle may help bring more buyers to the table this year.

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The Pro factor

Retailers, too, are riding high expectations.

A top Delhi-based multi-brand retailer, who requested anonymity, said consumers had already phoned asking for potential delivery dates of the iPhone 16.

“After at least four years, we found heightened consumer interest, especially in the ‘Pro’ iPhones—which are now priced better," he said. “This can help us a lot, since until last year most buyers of the top iPhones would look for ways to purchase their smartphones from the UAE, the US or the UK."

Another retailer, who runs two multi-brand consumer appliances and electronics outlets in Kolkata, indicated similar demand, saying the reduced pricing of the Pro model as a key factor fuelling early indicators of demand for the iPhones.

Manish Khatri, partner at Mumbai-based retailer Mahesh Telecom, also said consumer interest was strong in the new iPhones.

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“The iPhone 16 could be the star of the show this time… distribution channels are already promising substantial shipments to cater to demand. While this isn’t really new and Apple has remained strong, it now remains to be seen how the sales play out between online versus offline channels," Khatri said.

The heightened expectations from Apple’s new iPhones come even as AI remains premature.

Generative AI “is still gimmicky", said IDC’s Singh. “Once the features roll out, we may see more interest in the new iPhones from the start of next year."

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