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FILE PHOTO: CEO Tim Cook presents the new iPhone 11. (REUTERS)
FILE PHOTO: CEO Tim Cook presents the new iPhone 11. (REUTERS)

Why Apple registered double digit growth in India

  • According to Apple, the latest iPhone models were the key drivers for the growth without providing specific growth numbers for India market
  • However, competition in the premium segment is going to get tougher with the likes of Xiaomi now expected to make a more aggressive play for it

Apple reported double digit growth in India in October-December quarter of 2019. Speaking to analysts during the announcement of Apple's first fiscal quarter 2020 results, CEO Tim Cook said, “We grew double digits in emerging markets led by strong performances in Brazil, mainland China, India, Thailand, and Turkey."

According to Apple, the latest iPhone models were the key drivers for the growth without providing specific growth numbers for India market.

“New iPhones primarily the iPhone 11 was the default choice for many buyers in luxe segment (above 50k). iPhone has close to 12 million user base in India, which is now buying accessories and services," said Faisal Kawoosa, founder and chief analyst at techARC.

Apple launched a slew of services like video streaming platform Apple TV+ and exclusive game platform Arcade in November 2019 and they are also available to Apple users in India starting at 99. Apple Music was launched in India in 2015.

India, which is now the second largest smartphone market after surpassing the US for the first time in Q4 2019 in terms of annual shipments, as per Counterpoint's January report, has been largely dominated by Chinese companies. However, Apple has finally started making inroads and was one of the fastest-growing smartphone vendors in Q4 2019 in India. Counterpoint attributed Apple's success to the multiple price cuts on iPhone XR device, which was made possible by the local manufacturing of the model in India which started in the second half of 2019. The aggressive pricing of iPhone 11, cashback offers and good channel strategy also boosted the sales during the festival season in India.

Despite the double digit growth, Apple still hasn't made to the top five smartphone vendors list. Kawoosa doesn’t expect phenomenal change in 2020 for iPhone, adding, “we will have to wait a couple more years for it to have growth where it can aspire for 5% market share. That will happen as right now the feeder segment is growing for iPhone."

Navkendar Singh, Research Director at IDC India, feels things are looking good for Apple in India and with ramping up of manufacturing in India in 2020, Apple will be in a better position to maintain price points and active price correction on previous models.

However, competition in the premium segment is going to get tougher with the likes of Xiaomi now expected to make a more aggressive play for it.

“With several other brands planning aggressive play in the mid premium price points of Rs. 30,000 to Rs.50,000 (Xioami with Mi, Oppo with Reno, One Plus with new launches and Samsung with Lite version of Note 10 and S10), Apple will face intense competition in these fast growing segments. It becomes imperative for Apple to go aggressive on marketing and price point play to sustain this momentum during the year," adds Singh.

To boost its sales in India and connect better with the local community, Apple has been planning to set up three physical stores in line in with its globally renowned Apple stores along with an online store. The latest reports suggest, Apple’s online store is likely to get operational in Q3 2020.

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