China | Apple will focus on India to boost iPhone sales as China slows

Apple will focus on India to boost iPhone sales as China slows

January 27, 2016 12:44 PM (UTC+8)

 

Apple thinks China’s a nice country, but it’s going to be hanging with India now.

Late Tuesday, the tech giant reported its slowest-ever rise in iPhone shipments and forecast its first revenue drop in 13 years.

Apple-logo-930x546Two years ago, Apple signed a deal with China Mobile, the world’s largest mobile phone carrier. Since then China has been instrumental to the iPhone sales growth. But it appears that the economic slowdown in China is biting into iPhone sales.

So, Apple is looking to the greener pastures of India where an expanding middle class with its rising wages looks ready to jump on the iPhone bandwagon.

Sales of the company’s flagship smartphone climbed 76% in India from the year-ago quarter, Apple Chief Financial Officer Luca Maestri said.

Apple sold an estimated 800,000 iPhones in India in the fourth-quarter, its highest amount ever, but still just a fraction of the 28 million smartphones sold during that period, according to Counterpoint Technology Research.

While revenue in Greater China rose 14% in the fourth quarter, Apple is beginning to see a shift in the economy, particularly in Hong Kong, Maestri told Reuters.

The problem is most Indians, nearly 70%, buy smartphones selling for less than $150, while the basic iPhone 6S sells for about $700 in India, nearly half the average annual wage.

“In many ways India is very similar to what China was a few years ago, but the middle class here is still very small and it can be two to three years before Apple gets a similar level of success in India,” Counterpoint Technology Research analyst Tarun Pathak told Reuters.

With Apple products coveted status symbols in India, just as in China, the company is “increasingly putting more energy” into India, citing a largely youthful population with rising disposable income as more people join the workforce.

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