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| Apple CEO Tim Cook gestures at the launch of India's first Apple retail shop in Mumbai, India, April 18, 2023. REUTERS/Francis Mascarenhas |
When Apple Inc (AAPL.O) stunned investors this week with an increase in iPhone sales amid a decline in the global smartphone industry, Chief Executive Tim Cook praised developing nations like India where the firm is drawing away Android phone customers.
Cook is banking that such regions will present greater prospects for development, with their young populations and comparatively few iPhones.
Shares of Apple climbed more than 4% on Friday, putting the world's most valuable business on pace for gains of approximately $120 billion in market value.
Apple claimed iPhone sales grew 1.5% to $51.3 billion for its fiscal second quarter even as worldwide smartphone shipments plummeted 13% in January to March, according to research company Canalys, whose data indicated Apple gained market share from Android phones.
Apple says it achieved sales records in various countries spanning South Asia, Latin America and the Middle East.
"We're putting efforts in a number of these markets and really see, particularly given our low share and the dynamics of the demographics, a great opportunity for us in those markets," Cook told investors during a conference call.
India is undoubtedly Apple's largest emphasis. The business just launched its first two retail locations there, in Mumbai and Delhi, and although Apple does not reveal sales for the nation, Cook told investors that it established a quarterly record and percentage growth was in extremely high double digits year-over-year.
"There are a lot of people coming into the middle class, and I really feel that India is at a tipping point, and it's great to be there," Cook remarked on the conference call.
Apple was the second greatest income producing brand in India in 2022, second only to Samsung as it garnered 18% of the entire value of smartphone sales, according to research company Counterpoint.
For Apple, selling an iPhone in an emerging country symbolizes more than simply the sale of one gadget - it represents the possibility to get people hooked on Apple products and services over time. Customers who start with an iPhone could eventually add an Apple Watch or AirPods or join up for subscription services.
Cook said he saw prospects for Apple in India in services but noted that average revenue per user - a number known as ARPU in the subscription sector - would take time to catch up to Apple's other regions.
USED IPHONE BOOM
Part of the reason why Apple has been able to acquire market share in both developing and established economies is the creation of a burgeoning market for used iPhones.
Sales of refurbished iPhones climbed 16% in volume internationally during 2022. India topped the surge with a 19% spike, according to Counterpoint, with iPhones accounting for 11% of secondary smartphone sales in India.
In an interview with Reuters on Thursday, Apple's Cook claimed little of Apple's direct iPhone income comes from reconditioned handsets. However he said the business has worked to support the old iPhone industry by giving trade-in incentives on its iPhones and constructing them durable enough to survive numerous 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.