Although smartphone sales are plateauing in most markets, especially after the demands brought by COVID-19 have been ebbing, Apple is expected to benefit from India's huge market amid the premiumization trend.
Counterpoint Research told CNBC that India, which constituted about 4% of global iPhone sales in the second quarter of the year, had become Apple's fifth-largest iPhone market after the US, China, the UK, and Japan. Meanwhile, the iPhone market share in India's smartphone market rose from 3.4% a year ago to 5.1% in the past quarter.
Meanwhile, according to Investors, Morgan Stanley analyst Eric Woodring said in a note forecasting that India is expected to account for 15% of Apple's revenue growth and 20% of installed base growth over the next five years. Woodring said that Apple sales generated from India could rise from US$6 billion to US$40 billion in the next decade. By 2032, India is projected to contribute over 170 million new users to Apple products, representing approximately 10% of the total Apple user base.
CNBC quoted Ankit Malhotra, senior research analyst at Counterpoint, saying that Apple's growth can be attributed to its overall strategy focusing on distribution and affordability as well as the industry-wide factor that is the premiumization happening in India.
Apple has been heavily investing in India. According to a corporate filing, Foxconn Hon Hai Technology India Mega Development Private Limited announced that it had bought US$33.2743 million worth of equipment from Apple Operations Limited.
According to sources, next-generation iPhone is expected to come up in the second half of the year, Foxconn is looking to expand its production capacity in India, adding that Apple is eyeing India to stimulate its sales. Besides, industry insiders told DIGITIMES that the equipment that Foxconn bought from Apple Operations Limited might be used to produce iPhone 15 or iPhone 15 Plus or both.
It is to be noted that in the past, Foxconn mostly made premium iPhones rather than the basic models of iPhones. However, other contract manufacturers for Apple in India have limited production capacity or have not entered mass production, leaving Foxconn the only choice for Apple in India to make the basic iPhone models.
Source: IDC, July 2023
