Energy & Technology

Apple Turns to Emerging Markets for Future Growth, Beginning with India

Apple CEO Tim Cook

Apple CEO Tim Cook attributes the company’s recent rise in iPhone sales to emerging markets, such as India, where they are luring away Android phone users. Cook sees these markets as providing more opportunities for growth, thanks to their youthful populations and relatively few iPhones. In Apple’s fiscal second quarter, iPhone sales rose 1.5% to $51.3 billion, despite global smartphone shipments falling 13% in January to March. Data from research firm Canalys also showed that Apple gained market share from Android phones.

Several countries across South Asia, Latin America, and the Middle East set sales records for Apple. “We’re putting efforts in a number of these markets and really see a great opportunity for us in those markets, particularly given our low share and the dynamics of the demographics,” Cook told investors during a conference call.

India is perhaps Apple’s biggest focus, and the company recently opened its first two retail stores in Mumbai and Delhi. While Apple does not disclose revenue for the country, Cook told investors that it set a quarterly record and percentage growth was in very strong double digits year-over-year. Apple was the second-biggest revenue-generating brand in India in 2022, with 18% of the total value of smartphone shipments, according to research firm Counterpoint.

For Apple, selling an iPhone in an emerging market represents more than just the sale of one device. It represents the chance to get consumers hooked on Apple devices and services over time. Customers who start with an iPhone might later add an Apple Watch or AirPods or sign up for subscription services.

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Cook said he saw opportunities for Apple in India in services but said that average revenue per user, a metric known as ARPU in the subscription business, would take time to catch up to Apple’s other markets.

Part of the reason that Apple has been able to gain market share in both emerging and developed markets is the emergence of a booming market for used iPhones. Sales of refurbished iPhones rose 16% in volume globally during 2022. India led the growth with a 19% jump, according to Counterpoint, with iPhones accounting for 11% of secondary smartphone sales in India.

In an interview with Reuters, Cook said little of Apple’s direct iPhone revenue comes from refurbished devices. However, he said the company has tried to bolster the used iPhone market by offering trade-in deals on its iPhones and building them sturdy enough to last several owners. “We encourage the market and it provides us an opportunity to hit some price points that we would not otherwise play in,” Cook said in the interview.

In conclusion, Apple is increasingly focusing on emerging markets for growth, with India being its biggest target. Apple’s ability to gain market share in both emerging and developed markets can be attributed to the emergence of a booming market for used iPhones. By offering trade-in deals and building sturdy devices, Apple is capitalizing on the opportunity to sell iPhones to customers who might later add other Apple devices and sign up for subscription services.

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