Apple’s India Fourth Quarter Sales Up 34%, Leading the Market for the First Time

In 2020, Apple launched its first online store in India, marking a major step for the American smartphone maker’s ambition to expand iPhone sales in the fast-growing Indian smartphone market.

The Indian market had been dominated for long by Chinese phone makers, like Xiaomi and Oppo, who won over a large section of Indian consumers through affordable phones.

Apple used third party vendors and e-commerce operators, such as Amazon and Walmart to sell products in India. But that was partly responsible for its meagre share in the huge South Asian market. Before now, Apple accounted for only one percent of all smartphone shipment to India, far behind Chinese companies, Xiaomi and Oppo and South Korea’s Samsung.

The online store which kicked off September 23, 2020, came with incentives designed to draw Indian consumers. Apple planned to offer services such as; personalizing some devices, including iPads, with engravings, providing assistance in English and Hindi to enable customers to personalize their device according to their preferences. The website was also designed to allow customers to configure Mac laptops according to their needs.

The new decision to open a retail store and the incentives introduced alongside it seems to have paid off in less than two years. Bloomberg reports below that Apple had its strongest quarter for iPhone sales in India yet, indicating that the Cupertino, Calif.-based company is finally making progress in the world’s fastest-growing smartphone market.

Sales increased to 2.3 million units in the fourth quarter, up 34% from a year earlier, according to numbers from the market research firm Counterpoint. China’s Xiaomi Corp. and South Korea’s Samsung Electronics Co. sold 9.3 respectively, leading in terms of units.

Apple appears to have pulled in more revenue than any of its rivals, however, because of the iPhone’s high price tag, according to Counterpoint’s calculations. The U.S. company took in an estimated $2.09 billion for the quarter, edging aside Samsung with revenue of about $2 billion.

“It’s a turning point for Apple in India,” said Neil Shah, the Mumbai-based partner and research head at Counterpoint Technology Market Research. “Indians were willing to lavish money on premium phones during the pandemic because everyone’s lives revolved around their devices and there was nothing else to spend on.”

While Apple has become the most valuable company in the world on the popularity of its iPhone, it has struggled in the 1.3 billion-person India market. Pricey iPhones are far beyond the reach of many local consumers, a situation aggravated by stiff import tariffs Apple had to pay on devices made outside the country.

In 2018, the company stumbled through multiple top-level executive departures in the country, sliding sales and irate retail partners who protested its online discount practices. Apple sold 1.8 million iPhones for the entire year, fewer than it sold in the most recent quarter.

In addition to the online store, Apple has applied other strategies including streamlined discounts and local manufacturing of iPhones. It’s planning to open company-owned retail outlets in multiple cities in the coming quarters.

During the recent October to December period, India’s festival buying and gifting season, the phone maker priced its basic iPhone 12 model at less than 50,000 rupees ($668), offering cashback incentives and easy payment plans.

Apple is still a tough sell in a country where per-capita income was under $2,000 in 2020, according to World Bank data. For the most recent quarter, the average iPhone selling price in the country was $908, while Samsung’s was $278 and Xiaomi’s was $172, according to Counterpoint.

Apple has resisted introducing a cheaper device just for the local market, a common strategy for foreign brands such as Netflix and Kellogg’s. While Apple’s market share has climbed, it remains in the single digits at just over 5% for the quarter. Indians purchased 44 million smartphones in the period.

It has challenges beyond price in the market. Apple manufacturing partners, Foxconn Technology Group and Wistron Corp., have faced blowback in India because of their treatment of workers. The U.S. company took the unusual step of placing a Foxconn factory near the southern Indian city of Chennai on probation after protests about food safety and accommodation standards.

In addition, the country’s antitrust regulator, the Competition Commission of India, has begun a probe into app store fees.