However, one bright spot for the company was its revenue from the Asia-Pacific region ex-Japan. The iPhone maker made $3.59 billion in the region, a rise of over 13% YoY, in the third quarter.
India is the second-largest smartphone market in the world, and it’s one market Apple has found it tough to crack. The tech giant continues to have a negligible market share in the country.
Apple’s market share in India remains negligible
Apple struggles in India for two main reasons. First of all, the Indian population is very price sensitive given its low per-capita income. Second of all, the iPhone’s price tag in India includes a hefty luxury tax. The relatively strong US dollar to the Indian rupee doesn’t help.
For example, Indians have to pay the rupee equivalent of over $1,400 to purchase the basic version of the iPhone XS, which is available for $999 in the US. Many Indians don’t make that much in a month!
Earlier this year, in a rare move, the iPhone maker cut the prices on its iPhone XR in India. It slashed the price of the 64 GB iPhone XR from 76,900 rupees (roughly $1,080) to 59,000 rupees (around $840).
Apple saw strong growth in India in the last quarter
This move seems to have paid off. On Apple’s third-quarter earnings call, the company said that sales in the country had grown in “strong double digits”. The company expresses delight over the growth.
As with the Greater China region, though, Apple doesn’t break out its revenue from India.
Despite this growth, Apple still has a negligible market share in India. The world’s second-most-populated country is dominated by smartphones made by Chinese vendors such as Xiaomi, Oppo, and Vivo. These offer cheap, value-for-money alternatives to the iPhone.
According to recent research by Canalys, the top five smartphone vendors strengthened their presences in India during the second quarter.
As we mentioned above, Apple saw decent growth in India in the quarter. However, the Others segment saw its shipments shrink 42% YoY to 3.9 million. The segment cornered only 12% of the Indian smartphone market in the period.
Apple makes up 1%–2% of the Indian market, according to some estimates.
The tech giant is shifting some of its facilities to India
However, the company now recognizes the potential it has in the country. Apple is beginning to shift some of its production facilities to India. This addresses two problems.
Firstly, the luxury tax on iPhones will vanish, bringing the iPhone’s price tag down significantly in the future. The company’s third-quarter growth shows that a decrease in price would help its shipments in India.
Secondly, if the US-China trade war escalates, the company could insulate some of its shipments from tariffs.