Tim Cook the CEO of Apple, did not mention India during its company’s earnings calls with its analysts, he was worried about the fact that there are not one but more key factors on why iPhone sales are not getting stronger in India.
Tim Cook said that their customers are using their previous phones longer than expected.
Tim Cook said: “When you pair this with the macroeconomic factors, particularly in emerging markets, it resulted in iPhone revenue that was down 15 percent from last year.”
He added: “One of those factors, weak macro-conditions in some emerging markets, was significantly more severe than we originally foresaw, especially in Greater China. That challenge was compounded by quarterly iPhone upgrades that were lower than we anticipated.”
Tim Cook also believes that foreign exchange is one factor that is slowing their phones sales. He said that the strength of the USD made their products especially their iPhones more expensive in countries like China and India.
Tim said: “The foreign exchange issues amplified that difference in international markets, in particular, the emerging markets which tended to move much more significantly versus the dollar.”
Tim says that subsidy is the main cause of these issues in the developing and developed markets.
He said: “Third is our battery replacement programme. For millions of customers, we made it inexpensive and efficient to replace the battery and hold onto their existing iPhones a bit longer.”
Apple has started to reduce the prices of their products in major countries like China, and hopefully, India will be next, where the iPhone can be bought for Rs. 1 Lakhs.
Tim Cook revealed in an interview with CNBC that India is a very important market for the company.
He said: “It is a major focus. If you look at how we’ve done over the years, we’ve gone from, you know, $100, $200 million business to, last year, we hit – we exceeded $2 billion (roughly Rs. 14,200 crores)”.
Tim added: “We’d like to put stores there. We would like some of the duties and so forth that are put on the products to go away. And we’re working closely with the team there.”
The company is looking for tax relief and other things from the government, this will allow them to develop and assemble more phones and open its own brand stores. Their proposal is being evaluated.
In a report by the Counterpoint Research, in 2018 apple shipments were only 1.7 Million which is almost 50 percent lower than the 2017 shipments which were 3.2 Million.
Tarun Pathak the Associate Director at Counterpoint Research said: “We can expect some kind of price correction going forward as Apple has given indications that they will look at pricing outside the US closely now.”
Tarun added: “India continues to be a critical market for Apple as premium segment is likely to grow faster than the overall smartphone market.”
Apple has hired Ashish Chowdhary as their new operation head in India, he is the former Chief Customer Operations Officer at Nokia Networks, and they did this to boost their sales in India.
After hiring Ashish Chowdhary, Apple showed that they are putting maximum effort in creating a long-term growth in a country like India, where the market is price sensitive, a country where people don’t really spend a lot of money on fancy phones.