Apple made a surprise in the second quarter of 2023. When sales of other cellphones were weak, iPhone sales actually increased by 1.5%.
Apple CEO Tim Cook credits this success to emerging markets such as India. In that country, according to Cook, Apple has succeeded in inviting Android users to 'convert' to the iPhone.
Developing markets like India are Apple's main target, because they think it will provide more opportunities for sales growth, due to the small population of the younger generation and iPhone users.
During Q2 of fiscal 2023, Apple recorded a 1.5% growth in iPhone sales to USD 51.3 billion. Yet according to Canalys, in the same period, global HP shipments fell 13% between January and March.
Apple claims that they have recorded sales records in several countries in the South Asia, Latin America and Middle East regions, we were quoted as saying by Reuters, Monday (8/5/2023).
"We pushed hard in this market and finally saw, especially because of our low market share (in this market) and dynamic demographics, a big opportunity for us in that market," Cook said on a conference call with Apple investors.
But Apple's biggest focus is certainly on India. They launched the Indian market, including by opening the first two retail stores in Mumbai and Delhi. Apple did not disclose their income from that country, but Cook claimed that Apple recorded a record double-digit growth year over year.
"A lot of people are in the middle class category, and I really feel that India is at a breaking point right now, and I feel really great to be there," Cook added.
In India, Apple is the company with the second largest revenue in 2022. The leader was Samsung whose mobile phone shipments increased by 18%.
Meanwhile for Apple, if they are successful in selling an iPhone in a developing market, sales of other devices have the potential to increase. This is because consumers will usually be provoked to buy other Apple devices or services in the future.
For example, a user who recently bought an iPhone might buy an Apple Watch, AirPods, or sign up for Apple's paid services in the future.
But Cook acknowledged that Apple will need time to ramp up revenue from subscription services in India. Especially so that the average revenue per user (average revenue per user/ARPU) can catch up with Apple's ARPU in other countries.