Home / Industry / Manufacturing /  Pricey Apple iPhones gain market share in cost-conscious India

Apple Inc. is poised to become one of India’s top smartphone sellers for the first time, led by strong sales of its pricey iPhone 13 model in a declining smartphone market.

The model’s sales accounted for 4% of all smartphones sold in October, according to data from market researcher Counterpoint Research. Launched about 15 months ago, iPhone 13 has been one of the top sellers for Apple as well as in the overall smartphone market, analysts and retailers said.

iPhone 13 was the only premium-segment smartphone to figure in the top five devices sold in October—all other smartphones were priced below 15,000. Premium smartphones are those that are priced above 30,000. The sales ranking follows iPhone 13 topping smartphone shipments in the September quarter, according to Counterpoint.

To be sure, the iPhone 13, which currently retails at 64,900, was available at under 50,000 during the 2022 festive season sales period between the last week of September and October.

Despite a decline in India’s smartphone market, Apple’s sales have remained robust due to strong demand for premium devices such as the iPhone. This trend indicates a K-shaped economic recovery in India, where the wealthy are faring better than the poor, suggesting that the rich have been financially unaffected by the pandemic.

In fact, iPhone 13 was also the highest-selling smartphone in the first week of festive sales on e-commerce platforms Amazon and Flipkart, as well as in offline multi-brand retailers such as Croma and Vijay Sales.

Manish Khatri, a partner at Mumbai-based electronics retailer Mahesh Telecom, said iPhone 13 has clearly seen demand among buyers, even though the overall consumer demand in the Indian smartphone industry “remains extremely weak over the past three months, following festive sales".

“However, the entire demand (for iPhone 13) may not be entirely organic", he said. For instance, many buyers ended up buying the iPhone 13 “due to a lack of availability of the new generation iPhone 14 series, especially the Pro and Pro Max models. Since the iPhone 13 and iPhone 14 are not drastically different in terms of their feature sets, buyers do not mind the difference", Khatri said.

“Apple is likely to see its shipments reach 6.5 million units in CY22 (calendar year 2022)—up from around 4.8 million units in CY21. This marks a rise of about 35% in CY22 after the brand saw a 100% rise in shipments in CY21. This could have been fuelled by shipments of the iPhone 13 during the festive period, in a period of degrowth due to the lack of availability of smartphones in the sub- 15,000 price bracket," said Navkendar Singh, associate vice-president at market researcher IDC India.

Apple’s strong sales in the face of India’s declining smartphone market are expected to make it the second- or third-largest revenue-generating brand in the country. According to industry experts, Apple’s per-device margin is nearly 10 times that of rival phone brands with large market shares in India, such as Xiaomi and Samsung.

“Apple’s average selling price (ASP) of devices in India is $1,000, or around 75,000-80,000. Out of this, the company has a margin of around 20,000-25,000 per device. In comparison, Xiaomi, India’s top smartphone brand by shipment volume, has an average selling price of around 17,000, out of which its margin per device is around 2,000. Samsung operates across a larger segment of prices; so, its margin is slightly higher than Xiaomi’s—but Apple still has a much larger per-device margin than any of the higher-selling brands. This would make it the second or third top-earning brand in the Indian smartphone market, by revenue, for CY22," a top industry expert said on the condition of anonymity.

A second person, who also wanted to be anonymous, added that Apple’s strong performance is likely to see it rank among the top five smartphone brands in India for the December quarter — driven primarily by its strong sales during the October festive season. “Apple benefits majorly from a host of affordable financing options in a market that saw phone shipments in the country decline by nearly 50% sequentially in November. While this could lead to a decline of nearly 30% y-o-y in the December quarter, Apple has benefited from the lack of availability of choices in the affordable segment," he said.

Other than smartphones, Apple has also been “making inroads in the enterprise devices segments such as MacBook deals signed through the year, such as that with Indian IT services firm Wipro. Given the huge margins it has on every device, Apple’s revenues remain strong," Singh said.

However, the pace of growth may not sustain in the long run, experts said. “Apple is unlikely to sustain the kind of growth that it has seen in India over the next two years. It is not likely to see the domestic market as a heavy shipment region since device refresh cycles in India extend up to three to five years. For instance, it is unlikely to see a further 6.5 million new buyers of its iPhones in CY23, so the growth pace is likely to stall," Singh said.


Shouvik Das

Shouvik Das is a science, space and technology reporter for Mint and TechCircle. In his previous stints, he worked at publications such as CNN-News18 and Outlook Business. He has also reported on consumer technology and the automobile sector.
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