Apple Posts Highest India revenue in fiscal 1st half

Apple is planning to bring all its initiatives to the Indian market, including retail, as it sees a big opportunity in the South Asian nation where its sales rose 20% in March ending quarter creating a record in the first six months.

Apple CEO Tim Cook recognised the extremely low market share that the Cupertino headquartered smartphone maker has in India but added that it was working with carriers who were investing heavily in creating LTE networks in the country.

“India, we set a new first-half record. So we continue to put great energy there and try to – our objective over time is to go in there with all of our different initiatives from retail and everything else,” Cook said in an earnings call with analysts after the company announced its best-ever overall March quarter results, with revenue of $61 billion, up 16% on-year, and net income of $13.8 billion, for the quarter ended March 2018.

He added, “So we're working toward those things. It's a huge market and it's clear that many people will be moving into the middle class over time, as we've seen in other countries.”

Apple chief financial officer Luna Maestri added that performance was very strong in emerging markets such as India, “where revenue was up 20%,” while it saw the strongest growth rate of 21% year-on-year from Greater China region, in last 10 quarters.

Besides its earnings from iPhones, Apple sold 4.1 million Macs, generating year-over-year growth in many emerging markets including Latin America, the Middle East and Africa, Central and Eastern Europe and India.

Apple has since long been planning to open its first retail store in India but has faced several hiccups including adhering to local sourcing norms set by the Indian government. The world’s leading technology company has started manufacturing some of its models in India - iPhone SE and iPhone 6s - from a third party manufacturer Wistron Corp, in Bengaluru, however, volumes continue to remain on the lower side.

Apple’s share in the Indian smartphone market has not been more than 2-3% during any quarter even though it leads the segment of above Rs 30,000 devices in the October-December 2017 period with about 47% share, ahead of Samsung and Chinese smartphone maker OnePlus.

“India is the third largest smartphone market in the world. There's obviously huge opportunities there for us and we have an extremely low share in that market overall. And so we're putting a lot of energy there and working with the carriers in that market and they're investing enormously on LTE networks and the infrastructure has come quite a ways since we began to put a lot of energy in there because of their leadership and so forth,” Cook added.

Apple has been working with Reliance Jio and Bharti Airtel among Indian carriers, who have been offering 4G services while bundling data services with free voice on the smartphone, besides offering cash backs to consumers to rev up sales, even as pace of growth for the company has slowed down when compared to the previous five years.

Apple India’s net profit was 44% higher to Rs 373.4 crore for the year ended March 2017, while its total income was 17% up on-year trenching Rs 11,704.5 crore. The company’s India arm, which saw leadership changes in the last couple of months, has ploughed back the profits into operations, at a time when the Indian market is dominated by Chinese players have taken 57% share an all-time high.