Apple CEO Tim Cook recently credited emerging markets, particularly India, for the company’s rise in iPhone sales despite a decline in the global smartphone market. With the hope of gaining market share, Apple is targeting younger populations in countries where relatively few people use iPhones. Cook believes that India, in particular, presents a great opportunity for Apple due to the growing middle class and strong double-digit year-over-year growth. As a result, Apple recently opened its first two retail stores in Mumbai and Delhi.
In the first fiscal quarter of 2023, iPhone sales rose by 1.5% to $51.3 billion, while global smartphone shipments decreased by 13% from January to March. Apple gained market share from Android phones in this period, according to research firm Canalys. Additionally, Apple set sales records in several countries across South Asia, Latin America, and the Middle East.
India has become Apple’s primary focus, with the company being the second biggest revenue-generating brand in the country in 2022, after Samsung. Apple gained 18% of the total value of smartphone shipments, according to research firm Counterpoint. For Apple, selling iPhones in emerging markets provides an opportunity to introduce consumers to Apple devices and services over time. By starting with an iPhone, customers might later add an Apple Watch, or AirPods, or sign up for subscription services.
Apple also benefits from the growing market for used iPhones, which increased 16% in volume globally in 2022, according to Counterpoint. India led the growth with a 19% jump, with iPhones accounting for 11% of secondary smartphone sales. Although little of Apple’s direct iPhone revenue comes from refurbished devices, the company has tried to bolster the used iPhone market by offering trade-in deals and building devices sturdy enough to last several owners.
Apple sees opportunities for growth in India in the services sector, although average revenue per user (ARPU) will take time to catch up to Apple’s other markets. As Apple continues to focus on emerging markets, it hopes to capitalize on the youthful populations and growing middle class, beginning with India.