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Apple Will Need to Target Developing Markets for iPhone Growth

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Dec. 28 2018, Updated 7:32 a.m. ET

Cheaper devices impacting iPhone shipments

In the previous part of this series, we have seen that Apple (AAPL) may be struggling to increase iPhone sales in fiscal 2019. Global smartphone shipments declined 6% in the third quarter of 2018. Apple managed to easily outperform the global smartphone market as shipments rose 0.5% to 46.9 million units.

At the end of the third quarter, Apple had a market share of 13.2% in the global smartphone market. However, Apple will need to target emerging economies (EEM) such as India (INDA) and China (FXI) to stall shipment decline.

China’s domestic giants such as Huawei and Xiaomi have increased smartphone shipments by 33% and 21%, respectively, in the third quarter, easily outperforming the global market.

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iPhone shipments fell 40% in 2018 in India

According to market research firm Canalys, Apple’s iPhone shipments in India fell 40% year-over-year in 2018. Apple generated $1.8 billion in sales in India, which is more than 50% lower than management estimates.

Though India has significant potential for smartphone growth, Apple products are priced way beyond the reach of an average smartphone user. Apple sales in India have risen from $100 million in 2011 to over $1 billion in 2015.

Apple is expected to achieve sales of $5 billion in India in 2018.

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