Expensive Apple iPhones are gaining market share in cost-conscious India

According to data from market researcher Counterpoint Research, sales of the model accounted for 4% of all smartphones sold in October. Launched about 15 months ago, the iPhone 13 has been one of the top sellers for Apple and the overall smartphone market, according to analysts and retailers.

The iPhone 13 was the only smartphone from the premium segment that was among the top 5 devices sold in October – all other smartphones were priced below €15,000. Premium smartphones are those that are priced at the top €30,000. The sales ranking follows the iPhone 13, which leads smartphone shipments in the September quarter, according to Counterpoint.

Certainly the iPhone 13 currently available in retail €64,900, was available at €50,000 during the 2022 festive sale period between the last week of September and October.

Despite a slowdown in India’s smartphone market, Apple’s sales have remained resilient due to strong demand for premium devices like the iPhone. This trend points to a K-shaped economic recovery in India, where the rich are doing better than the poor, suggesting that the rich have been unaffected financially by the pandemic.

In fact, the iPhone 13 was also the best-selling smartphone in the first week of festive sales on e-commerce platforms Amazon and Flipkart, as well as offline multi-brand retailers like Croma and Vijay Sales.

Manish Khatri, a partner at Mumbai-based electronics retailer Mahesh Telecom, said the iPhone 13 was clearly in demand among buyers, although overall consumer demand in the Indian smartphone industry “has remained extremely weak over the past three months following festive sales.” .

“However, all demand (for the iPhone 13) may not be entirely organic,” he said. For example, many buyers bought the iPhone 13 “due to the lack of availability of the new generation iPhone 14 series, especially the Pro and Pro Max models. Since the iPhone 13 and iPhone 14 are not drastically different in terms of their feature sets, the buyer doesn’t mind the difference,” Khatri said.

“Apple is expected to ship 6.5 million units in CY22 (calendar year 2022) versus around 4.8 million units in CY21. This represents an increase of approximately 35% in CY22 after the brand saw a 100% increase in deliveries in CY21. This may have been fueled by shipments of the iPhone 13 over the holiday season, at a time of slowing growth due to the lack of availability of smartphones in the sub- €price bracket of 15,000,” said Navkendar Singh, deputy vice president of market research firm IDC India.

Apple’s strong sales are expected to make the company the second or third-biggest revenue-generating brand in the country amid the declining Indian smartphone market. According to industry experts, Apple’s per-device margin is almost 10 times that of competing phone brands with large market shares in India, such as Xiaomi and Samsung.

“Apple’s average retail price (ASP) for devices in India is around $1,000 €75,000-80,000. The company has a margin of approx €20,000-25,000 per device. In comparison, Xiaomi, India’s top smartphone brand by shipping volume, has an average retail price of around €17,000, of which the margin per device is around €2,000. Samsung operates in a larger price segment; So the margin is a bit higher than Xiaomi’s – but Apple still has a much bigger margin per device than any of the top-grossing brands. This would make it the second or third largest brand in the Indian smartphone market by revenue for CY22,” said a leading industry expert on condition of anonymity.

A second person, who also wished to remain anonymous, added that Apple is likely to be among the top five smartphone brands in India due to its strong performance in the December quarter – mainly driven by strong sales during the holiday season in October. “Apple is benefiting greatly from a variety of affordable financing options in a market where nationwide phone shipments were down nearly 50% sequentially in November. While that could result in a nearly 30% year-over-year decline in the December quarter, Apple has benefited from the lack of availability of choices in the affordable segment,” he said.

Aside from smartphones, Apple has “also gained a foothold in the enterprise device segments, with MacBook deals signed throughout the year, like the one with Indian IT services company Wipro. Apple’s earnings remain strong given the tremendous margins it has on each device,” Singh said.

However, according to experts, the pace of growth may not last in the long term. “Apple is unlikely to sustain the growth it has experienced in India over the next two years. The domestic market is unlikely to be a high-delivery region as device refresh cycles in India stretch to three to five years. For example, CY23 is unlikely to see another 6.5 million new buyers of its iPhones, so the pace of growth is likely to stall,” Singh said.