Apple’s revenue reaches a historical high, with India playing an important role The second China?
Apple's record-breaking revenue is largely attributed to India, which is being compared to China
Recently, Apple released its financial results for the third quarter, achieving record-high revenue and a new record for the number of active Apple devices worldwide.
Apple Store in India
Apple CEO Tim Cook said that India is an incredibly exciting market and has been a major focus for Apple in the past few years.
Apple has experienced exponential growth in India, with sales increasing by nearly 50% each year since 2019. In this price-sensitive and highly competitive market, Apple is the only company that has steadily increased its market share for most of the past decade. How did Apple crack the code to gain traction in the Indian market?
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The growth and popularity of Apple in India began in 2015 when the company’s sales in India exceeded $1 billion for the first time. Apple attracted attention with the iPhone 6 and 6s series and enticed customers into the Apple ecosystem through Macbooks.
Apple’s revenue data in India from 2015 to 2022
Apple continues to expand its business in India. By 2023, Apple’s revenue in India is expected to reach $6 billion (approximately 400 billion rupees) by 2022.
In 2017, Apple opened its first assembly plant in India. Initially, Apple only assembled iPhone SE at a small factory located in Bengaluru, operated by Wistron. The company stated that this was an experimental initiative as Apple was exploring global markets to reduce dependence on manufacturing in China.
Apple’s first manufacturing attempt in India was a huge success. With the help of Foxconn, the company established a factory in Tamil Nadu and began expanding production. Since 2019, Apple has been assembling the latest versions of the iPhone in India.
Indian-made iPhones are gradually going global. In 2021, the production of iPhones in India accounted for 1% of the global production. Within just one year, the sales of iPhones produced in India accounted for 7% of the global iPhone sales. Apple has stated that they hope to increase this number to 25% by 2024.
India is now the main center for Apple’s global iPhone supply. Due to local production in India, the “Made in India” program has also helped Apple save 20% on import duties. Although iPhones in India are not the cheapest compared to the global market, most iPhones sold in India are made in India. If Apple did not produce iPhones in India, the prices would be 20% higher than they are now.
Prior to 2020, Apple relied on third-party distributors such as Amazon and Flipkart to sell products in India. There were also some authorized offline distributors, but Apple did not directly enter the end consumer market. However, Apple recognized the importance of the Indian market early on and opened its official online store in India in September 2020.
Some experts believe that Apple’s move was a stroke of genius, as the whole world was facing lockdowns due to the COVID-19 pandemic at that time. Apple’s top online partners, Amazon and Flipkart, also faced challenges due to delivery restrictions and shortages of delivery personnel, among other factors.
Apple’s own online store opened up two avenues – Indian consumers will be able to directly purchase products from Apple, and Apple can provide fully customized memory configurations for Mac computers. Apple also offers laser engraving on products such as iPad, which is only possible when Apple sells products directly to users.
Within the first year of operation, the Apple online store accounted for 4% of Apple’s total sales in India. With Apple’s plans to incentivize buyers to purchase directly from the Apple store, it is expected that this number will further increase. It is understood that Apple is planning to launch a co-branded credit card in India, which is likely to offer discounts when used on the Apple online store.
For many years, Indian buyers have been eager to see Apple establish its own offline stores in India. However, India’s foreign direct investment policy restricts Apple from opening its own exclusive retail chain stores in India. According to India’s FDI policy, foreign companies cannot operate their own single-brand retail stores unless 30% of their resources are outsourced locally.
Apple’s manufacturing plant in India has not only helped Apple find a new production base, but also opened the door for Apple to have its own offline retail chain stores in India. Since most of the iPhones sold in India are locally produced, Apple is able to meet the 30% local outsourcing requirement and has opened two new offline stores in India this year.
Apple’s first offline retail store in India opens
Apple’s first flagship store in India is located in Mumbai, called Apple BKC, and it opened on April 18, 2023. The second flagship store opened in Saket, Delhi on April 20, 2023. The significance of this event can be seen from the fact that it was unveiled by Tim Cook himself. These two stores mark a new chapter for Apple in India.
Within just three months of opening, Apple has already set record-breaking sales through its two offline stores. The Apple Store in Mumbai achieved sales of 100 million rupees (approximately 8.7 million RMB) on its first day, surpassing the monthly revenue of other retail chain stores in India.
Both Apple Stores in India have monthly sales of 250 million rupees (approximately 27.18 million yuan). In other words, Apple generates revenue of 500 million rupees through just these two offline stores in India.
Apple has just begun its foray into India. The company plans to establish a new manufacturing facility in the state of Karnataka with the help of Foxconn to expand its production in India. Apple also plans to open three new offline stores in India.
Clearly, India is not only a major sales market for Apple, but also an important manufacturing hub. If Apple continues to grow at the same rate in India, it is expected that India will soon account for a significant portion of Apple’s global revenue and profits.
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