Uptick in premium segment powers Apple’s growth in India

Ayushi Kar Mumbai | Updated on July 28, 2021

Marketing strategy, localisation move boost growth numbers

Apple’s strategy to scale up its marketing and localisation in India is paying off for the iconic phone brand with the company reporting record double-digit growth in the country.

While announcing the company’s financial results, Tim Cook, CEO, Apple inc, called out the growth in India. “The vast majority of markets we tracked grew double digits, with especially strong growth in emerging markets, including India, Latin America and Vietnam,” Cook said.

Analysts believe that a multitude of factors has played into this massive growth. Varun Mishra, Analyst at Counterpoint Research, said: “Apple continues to perform well in India. The iPhone shipments grew 144 per cent YoY. However, YoY might not be a fair comparison as almost half of the June quarter last year was washed out.” However, according to Mishra even if the pre-pandemic June quarter of 2019 (which was two years ago) is compared to now, Apple grew by 35 per cent.

Wider price point

Mishra explains that since 2020, Apple is available at a much wider price point catering to a wider set of customers. Apple also expanded its online purchase options in India, which gave it better leverage during pandemic lockdowns. Work-from-home and education segments also helped in the sales of iPads and iMacs and the services will pick up as well. Apple is also assembling iPhones in India which allows it to bring down the price points.

Faisal Kawoosa, founder of consulting company techARC, believes that mobility restrictions and pandemic fatigue for the high-end market segment could also have spurred sales for Apple. “A lot of this segment spends a good chunk of money on travel etc. which was restricted this year, which means they had money on hand to purchase such premium devices. Furthermore, the emotional upheaval due to the uncertainty created by the pandemic could also have spurred on the purchases as an outlet to feel good and celebrate,” Kawoosa said.

Another reason according to Kawoosa could also be, companies, especially MNCs, offering incentives bonuses to spend during this year, for instance, IT companies offering iPhones as a part of their incentive packages.

Whether the growth that Apple enjoyed this quarter is a consequence of the general uptick in the purchase of electronics or a general uptick in preference for premium category brands amongst Indian consumers, remains uncertain. Mishra said “Overall, it is the budget and mid-segment devices that are driving volumes. However, there is still a lot of room for the growth of the premium segment in India. As existing consumers upgrade their devices, the premium segment is likely to grow further.”

However, Kawoosa observed that premium brands have seen an uptick this year. “Before September 2020, all mobile segments were enjoying an uptick as customers were looking to upgrade their devices. This year it is not like that. It is only in the premium segment that users are buying as they have more savings/money.”

Sanchit Vir Gogia, Chief Analyst and CEO of Greyhound research, said: “Apple's endeavour to do strong promotions and upsells by bundling devices and services also were a major factor in their growth in India. Furthermore, their online sales channel via sales on their website and home delivery in key markets also players a major role. Other initiatives that also contributed include, the introduction of a returns policy, investment in local distribution and assembly and the low entry point for devices.”

Published on July 28, 2021

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