Apple set to grow iPhone shipments in India but market likely to contract

Apple in India
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2020 will prove to be one of the best years for Apple in India for its smartphone business. The demand for older generation iPhones along with the latest iPhone series is expected to help Apple clock around 16-22% year-on-year growth in smartphone shipments in the ongoing calendar year. 

This will happen at the time when the overall smartphone market in India stares at a possible contraction due to the Covid-19-led lockdown and supply chain issues that severely impacted all handset vendors’ local factories. 

Apple’s shipments aew expected to grow 16% in 2020, up from 4% growth in 2019 and a massive 44% contraction in 2018, Counterpoint Research’s estimates. Cyber Media Research (CMR), however, expected even better performance for Apple with 18-22% year-on-year growth in iPhone shipments. 

Local market experts said that Apple has the strongest ever lineup for iPhones in India presently, including the older models such as iPhone XR and iPhone 11. They said that the premium segment appears immune to the market challenges and will post growth in 2020 unlike other price segments. Smartphones priced at $408 and above are considered premium in India by various market trackers.

It is not just India, as Apple is expected to outperform the global smartphone market, as per Counterpoint Research. 

After a disastrous 2018, Apple had changed its India strategy and started offering discounts, buyback schemes, along with financing options to drive sales in India. The change in strategy worked for Apple and it recorded its highest sales in the October-December quarter of 2019.

Counterpoint’s analysts said that Apple is likely to capture 2% share in the coming October-December quarter of 2020 with the help of bank offers and discounts on older models during the festive season.

Cyber Media Research (CMR) said that Apple iPhone shipments grew 67% year-on-year in the July-September quarter of 2020.  It said that the upcoming festive season in India will help Apple drive sales volume.

The iPhone 12 mini will be available in India at a starting price of $955.95 while iPhone 12 will be available at $1092. iPhone 12 Pro and iPhone 12 Pro Max will be available at starting prices of Rs $1637.63 and $1774.22 respectively. In comparison, iPhone 12 Pro and iPhone Pro Max are priced at $999 and $1099 in the US. iPhone 12 and iPhone Mini are priced at $799 and $699, respectively in the US.

iPhone XR, which was launched in 2018 is priced at $640, while 2019’s iPhone 11 is priced at $737. iPhone SE is currently the most affordable iPhone at $540 in India.

iPhone prices are higher in India than any other country due to the import duty imposed by the Indian government, as well as currency depreciation. However, all three Apple manufacturing partners –Foxconn, Wistron and Pegatron — are preparing to ramp up their local capabilities. The development is a part of Apple’s moves to shift iPhone production away from China and reduce its dependence on the country.

While the latest iPhone 12 pro series is considered steeply priced, analysts said that the iPhone 12 Mini could emerge as the best seller for Apple in India during the festive or Diwali season, a period towards the end of the calendar year where around 40-50% of the yearly sale takes place.

“Overall shipments for Apple will rise but it will happen because of aggressive offers and price refresh for iPhone SE, XR and 11. Not due to 12 per se,” Navkendar Singh, research director at IDC told the Economic Times. “India pricing is not very aggressive.”

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