Apple’s India gamble pays off

Apple’s India marketing gamble pays off with CEO Tim Cook saying in a recent conference call that Apple was very pleased with growth in the emerging markets.

July 24, 2013 05:28 pm | Updated November 28, 2021 08:59 pm IST - CHENNAI:

For once, it’s the Indian market in Apple’s gaze. India is now officially one of the few regions driving iPhone sales, at a time when the Chinese and American markets are subdued, with CEO Tim Cook saying in a recent conference call that Apple was very pleased with growth in the emerging markets.

“India was up over 400 per cent,” Mr. Cook said, after releasing the company’s first quarter results on Tuesday. A big part of this increase in sales, analysts say, can be attributed to Apple’s marketing blitz, and its introduction of EMI and smartphone exchange offers.

While Mr. Cook and an Apple spokesperson refused to disclose the number of iPhone shipments to India, several research reports claim that the company shipped nearly 200,000 iPhones to India between April and June, a three-fold jump from a year earlier when it shipped just 72,000 phones.

In addition to this, Mr. Cook also said that in India, iPad sales had registered double-digit growth.

Apple had launched a scheme last April which allowed consumers to exchange any of their old smartphones for a cash discount of at least Rs. 7,000 on the purchase of an 8 gigabyte iPhone 4.

“It was a gamble for them at the time. Many saw the move as a tactic that involved dumping older stock into the country. Some also thought that it could devalue the phone as a status symbol, but it has worked. It’s given them market share in a country dominated by lower-end phones,” said an analyst who did not wish to be named.

India had long been ignored by Apple, which saw greater potential in China, preferring to keep away, with Mr. Cook saying that the cost of distribution in India “was too high and complex.”

However, last year, Apple changed its business model and adapted to the Indian market by tying up with distribution companies Ingram Micro and Redington India—moving away from its initial practice of solely selling phones through carriers such as Airtel and Vodafone.

Q1 results

Emerging markets, however, are not enough to buoy net profit yet. Apple posted a quarterly net profit of $6.9 billion for its third quarter ended June 29, 2013— a drop of 22 per cent from the same period a year earlier. Its revenue was better than expected, with the company earning $35.3 billion.

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