Apple posts record quarter in India; Cook eyes market bigger than China, says analyst


Apple India brought in record revenue in the first quarter of the year, CEO Tim Cook said, as he cited the potential for it to become a key market for the tech giant in terms of iPhone sales and manufacturing.

During Apple’s earnings call on Thursday, Cook said Apple set a “quarterly record” for its business in India and saw “very strong, double-digit year-over-year” growth.

Apple does not disclose its sales figures in India. In the second quarter of its fiscal year, Apple reported total revenue of $94.84 billion.

Gene Munster, managing partner at Deepwater Asset Management, told CNBC on Thursday that he estimates India accounts for just 3% of Apple’s total revenue.

Investors focus on Apple’s potential in India after the tech giant recently ramped up its presence First physical store in the country last month,

India’s smartphone market is dominated by low-cost Android phones such as those offered by SAMSUNG and Chinese players like Oppo and Xiaomi. But the middle class is growing and consumers are willing to spend more on expensive appliances.

According to Counterpoint Research, smartphones priced above $400 now account for 10% of the total handset volume shipped, compared to 4% before the pandemic. This category of smartphones accounts for 35% of the total smartphone market revenue.

Speaking about the opportunities offered by the Indian market, Cook said: “A lot of people are coming into the middle class, and I really think India is at an inflection point, and it’s great to be there.”

India bigger than China in terms of sales?

Apple Chief Executive Officer Tim Cook gestures during the inauguration of Apple’s first retail store in India in Mumbai on April 18, 2023.

Puneet Paranjpe | AFP | Getty Images

Apple’s business in Greater China, which includes the mainland, Taiwan and Hong Kong, reported $17.81 billion in sales in the first quarter of the year, a decline in sales from the same period a year earlier.

Munster of Deepwater Asset Management said Apple CEO Cook is “laying the groundwork that India can be as big or bigger than China.”

“So all your concerns, my concerns about China, at least on the demand side, they’re having a lot of success … in India. It’s a big deal because … you have to find bigger markets to grow , and after a decade they are finally gaining traction in India.”

Munster was referring to concerns about a slowdown in China for Apple.

Deepwater's Munster says Apple CEO Tim Cook is laying the groundwork to make India 'bigger than China'

Still some doubt the potential of the Indian market for Apple. Richard Windsor, founder of the independent research firm Radio Free Mobile, pointed to the difference in GDP per capita between the two countries, a metric often used as a broad measure of average living standards. According to the World Bank, China’s per capita GDP is more than 5 times the size of India.

“So potentially a lot of Indians will want to buy the iPhone, in terms of the total number, in terms of the number of people actually carrying it in India, it’s probably going to be a lot less than in China,” Windsor said.

However, Apple’s strategy in India goes beyond just selling hardware. The company is also looking at India to become a major manufacturing hub as it seeks to reduce its dependence on China.

Apple started assembling its flagship iPhone 14 in India Last year – the first time the company has produced its latest device in the country, which is close to its initial launch. India’s Commerce and Industry Minister Piyush Goyal said in January that Apple is aiming to make 25% of all its iPhones in India.

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