India, a bright spot for Apple iPhones amidst global sales dip

We Indians are not just loyal but kind-hearted too. We don’t leave our old mates and friends in their tough times. So, while global iPhone sales dropped for a second straight quarter, Apple witnessed an increase of 51 percent in iPhone sales in India. So, now you know the reason for all the love Cook professes for the country.

Apple sold 40.4 million iPhones in the third quarter which was 15 percent less than the same period last year but slightly more than the average analyst forecast of 40.02 million, according to research firm FactSetStreetAccount.

What’s important to know here, is the fact that Apple sold 51 percent more iPhones in India over the past nine months. Although India contributes less than 1 percent of global revenues (as per FY 2014-15), rising revenues for Apple are a definitive good sign.With upcoming single-brand retail stores in India, this figure will surely shoot up further. As the government has now relaxed norms of local sourcing for retail companies with cutting edge technology, Apple is expecting to open its own stores in India soon.

Talking about the same, Tim Cook said during the earnings call, “India is now one of our fastest growing markets. In the first three-quarters of this fiscal year, our iPhone sales in India were up 51 percent year on year. We’re looking forward to opening retail stores in India down the road, and we see huge potential for that vibrant country.”

He also spoke about their recent initiatives in India like the first of its kind design and development accelerator and a new office to accelerate maps development.

Importantly, iPhones sales also increased in Japan, Turkey, Brazil, Canada and Sweden in addition to India. All these countries witnessed a double-digit growth in iPhone sales.

iPhones contribute 60 percent of the total revenues of Apple and hence form an important product line. Except the above-mentioned markets, their sales are falling almost everywhere including China pushing down Apple’s total revenue 14.6 percent in the fiscal third quarter, ended June 25. Demand for Apple’s phones has waned in China, partly because of economic uncertainty there, and has also slowed in more mature markets as people tend to hold on to their phones for longer.

“China was a major letdown,” said Patrick Moorhead, an analyst at Moor Insights & Strategy. “Samsung and Huawei are much more competitive now than a year ago and the Chinese economy is not doing well at all.”

Moorhead said, however, that increased services revenue – which includes the App Store and iCloud – was a “very big bright spot for Apple.” These services recorded nearly $6 billion in revenue last quarter. And this was 18.9 percent higher than the previous year.