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Apple increased its Indian profits by 44% in 2017, but it still has low market share in the country

Apple increased its Indian profits by 44% in 2017, but it still has low market share in the country
Tech2 min read

  • Apple’s profit in India grew by 44% to ₹3.734 billion for FY17.
  • 38% of smartphones sold in 2017 were in the range of ₹10,000 and ₹20,000, which grew by 12% since last year.
  • Apple’s overall rate of growth for sales dropped significantly from 40%, as reported for the past five years.

Apple’s profit in India grew by 44% to ₹3.734 billion for FY17, according to the Cupertino-based phone maker’s latest regulatory filings made to Registrar of Companies(RoC).

According to reports, this is a direct result of increase in the average sales price (ASP) of products in the smartphone industry, including the iPhone X, iPhone 8 series and the Apple Watch 3. Across the industry, the ASP has reportedly grown by 19% for the second consecutive year, signalling a change in India’s buying trends. It seems Indians are willing to pay more money for higher end devices now, instead of sticking to lower end smartphones.

A report by Cyber-Media Research says 38% of smartphones sold in 2017 were in the range of ₹10,000 and ₹20,000, which grew by 12% since last year. Better build quality, significantly better tech specifications, enhanced cameras alongside strong marketing encouraged users to upgrade to higher price bands. This growth is largely due to no-cost EMI offers and other discounts offered by online channels, which allows users to buy phones that would ideally be beyond their budgets.

That said, Apple’s overall rate of growth for sales dropped significantly from 40%, as reported for the past five years. This was due to Chinese players flooding the market with low-cost devices, including Oppo and Vivo, and their aggressive expansion within the country.

As of 2017, Xiaomi accounts for 26.8% of the Indian market, Vivo has 6.5%, OPPO owns 4.9%, while Samsung has 24.2% percent of the Indian smartphone market. That leaves Apple with less than 30% of the market, but still Apple India managed to grow its profit by 17% in FY17 from ₹99.976 billion to ₹117.045 billion. This is a result of the highly profitable models in its portfolio, despite Chinese brand’s hike to 57% market share in India, up from 53% earlier, as per figures revealed by a Hong Kong based researcher’s report.

The profits generated will be invested into further expanding Apple’s operations in India. As of March 2017 the company is pushing ₹15.565 billion to its India endeavours.

The iPhone X accounted for 35% smartphone profits during the last quarter of 2017, making it one of the most profitable smartphones. But Apple India’s sales were comparatively lower in the first three months of 2018, thanks to OnePlus gaining significant market share, up to approximately a fourth of the premium segment.

Expert predictions also account for the fact the rate of Apple’s stock price is not coming down any time soon. Analysts expect the company’s revenues to rise 10.1% YoY (year-over-year) to ~$86.2 billion in fiscal Q1 2018 (the quarter ended December 2017). Apple’s revenues are expected to rise 30% year-over-year to $68.8 billion in fiscal 2Q18. Analysts expect its revenues to grow 19.7% year-over-year to ~$274.3 billion in fiscal 2018, 2.3% year-over-year to ~$280.6 billion in fiscal 2019, and 2.6% year-over-year to $287.9 billion in fiscal 2020.

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