Apple may have pinpointed its next big target: India.
The country is on pace to pass the US on the list of the world's largest economies by 2075, according to a recent Goldman Sachs report. While there are plenty of looming obstacles along that road, it's becoming clear that Apple is a believer in India's transformation.
"I see a lot of similarities to where China was several years ago. And so I'm very, very bullish and very, very optimistic about India," Apple CEO Tim Cook told investors in 2017.
Six years later, Apple is just starting to see the fruits of that vision — it opened its first two stores in India earlier this year — and there are plenty of reasons to be as optimistic as ever.
Consider the following:
1. Only 5% of smartphones sold in India are iPhones
According to CNBC, iPhones accounted for 5.1% of all smartphone sales this year in India. As our Beatrice Nolan noted, that still pales compared to cheaper Android devices.
However, that gap is already starting to narrow. According to data collected by CNBC, the share is way up from 3.4% just a year ago, and iPhone sales jumped 50% in that timeframe. India also now accounts for 4% of all iPhone sales, making it the fifth-largest consumer of Apple phones.
2. Apple doesn't need to dominate the market to see huge revenue growth
Apple's share of China's smartphone market is still only 17%. However, Apple's slice of the pie in China nearly doubled from 9% just three years ago, and Greater China represented 19% of Apple's revenue in 2022. Apple doesn't need to be the country's leading phone maker for India to boost its business; it just needs to be in the mix.
And with India surpassing China as the world's largest country by population this year, the room for growth is huge.
3. India is young, with a growing middle class and an increased desire for fancy things
In contrast to China and its aging population, India has a youthful population with a big appetite for consumer goods. 50% of Indians are under 25 and 65% are not yet 35. While China still has a much larger middle class, Cook noted, "There are a lot of people coming into the middle class, and I really feel that India is at a tipping point."
With that growing middle class comes a higher demand for more expensive tech. The average selling price for a smartphone in India is up 18% this year, and "premium" smartphones now represent 11% of all sales, topping double digits for the first time.
4. Making more iPhones in India would be another big win
Apple is also ramping up its manufacturing in India as it looks to be less reliant on China. While it makes sense to avoid getting caught in the US-China trade war and the recent struggles of the Chinese economy, there is an even bigger reason: it is just cheaper now to make things in India.
"Labor in China is now expensive," Nitin Soni, senior director of Fitch Ratings told Forbes. "If you want to lower your cost of production, you have to move to other countries like India."
Apple already dominates the US and much of the rest of the world, but it is still a minor player in India. However, if India's economy can stay the course, Apple is in a prime position to plant a flag in the world's biggest country.
FAQs
India's economy projected to surpass the US's by 2075. The booming potential has caught the eye of Apple. A growing middle class and demand for high-end tech offers opportunities for Apple to grow revenue.
Why Apple wants India? ›
His comments underscore one reason Apple has recently made an aggressive play to expand operations in India: the country has a huge population, with a growing middle class willing to splash out more on high-end phones.
Why is Apple successful in India? ›
Apple's success in India has corresponded with the population's increased purchasing power as the country's economy improves. India took over China as the world's most populated country in 2022, making it a huge potential market for Apple.
Why Apple has failed in India? ›
Apple's initial struggle in the Indian market was partly due to the high cost of its products, making them inaccessible to a large segment of the population. Recognising this, Apple initiated local manufacturing, which significantly reduced costs.
What is Apple's focus on India? ›
The company is targeting India as a way to diversify its manufacturing and revenue sources beyond much larger market China, which has become riskier because of trade tensions with the US.
Is Apple moving from China to India? ›
Apple shifts iPhone production from China to India to tune of $14 billion.
Which country owns the iPhone? ›
Apple Inc. is an American multinational corporation and technology company headquartered in Cupertino, California, in Silicon Valley. It is best known for its consumer electronics, software, and services.
Why is the iPhone not popular in India? ›
That is because the iPhone has too much of Tax in India which makes it very expensive. In India, many people do not see the need to buy such an expensive phone. So many of the people buy cheaper Android phones. Apple iPhones are very expensive in India compared to the US.
What country is Apple the most successful in? ›
Download Table Data
| Country | iOS Market Share 2023 | Android Market Share 2023 |
|---|
| United States Virgin Islands | 60.69% | 38.86% |
| Canada | 60.47% | 38.91% |
| Macau | 59.43% | 38.26% |
| United States | 58.1% | 41.46% |
77 more rowsAs the legend goes, these apples were introduced in Himachal Pradesh by an American gentleman named Samuel Stokes. At the mere age of 22, in the year of 1904, he set sail for India. He found himself at a leper colony located at Subathu in the Shimla.
Quality: Apple maintains strict quality control standards for all its manufacturing facilities around the world, so the quality of your iPhone 15 will be the same regardless of whether it was made in India or China.
Is Apple losing in China? ›
Apple's no longer among top 5 smartphone vendors in China as domestic brands dominate market. Apple's market share has been shrinking in China, down to 14% in second quarter compared with 15% in the first quarter and 16% a year earlier.
Why is Apple expanding to India? ›
Shift from China
The company is targeting to expand the portfolio of products assembled in India to diversify its manufacturing and revenue sources beyond China, which has become riskier because of trade tensions with the US.
Where does India import Apple from? ›
Limited transport infrastructure to move domestic apples from the north of the country to other regions of India is also boosting demand for imported products. The USDA reports apple imports from Iran have nearly doubled so far in MY 2023/24, accounting for a large portion of the overall increase.
Will Apple succeed in India? ›
achieved a business value exceeding ₹2 lakh crore in India, driven by increased iPhone exports and domestic sales of products like MacBooks, iPads, and Watches. Apple's growth is notable for its rapid expansion in production and exports, likely the fastest by any company in India in the past 50 years.
Why India imports Apple? ›
While domestic production is also expected to increase slightly, demand for imported apples continues to grow as the Indian population rises and dietary habits shift towards healthier foods.
Is Apple doing well in India? ›
Apple Inc.'s annual sales in India hit a record of almost $8 billion, underscoring a rapidly growing market where the iPhone maker now assembles more of its devices and operates two flagship stores.
Why is Apple not selling in India? ›
Apple had tried to expand its retail presence in India for years, but the country's stringent local-sourcing rules for foreign retail firms barred Apple—and other international companies like Ikea—from selling directly to customers.
Why Apple uses China? ›
The Chinese government also offers Apple a great deal of subsidies to ensure their continued business in Asia. Historically, the United States has failed to offer major tax breaks to companies seeking manufacturing hubs, forcing businesses to relocate their assembly lines.
