Apple pleasantly surprised analysts when its quarterly revenue and earnings beat Wall Street’s targets on surprisingly strong sales of its flagship iPhone, sending its shares up 4 percent. Apple earned $6.9 billion, or $7.47 a share, on revenue of $35.3 billion. That compared with a profit of $8.8 billion, or $9.32 a share, on revenue of about $35 billion in the year-ago quarter.
And was India a part of that iPhone sales success story?
Responding to a question about the markets driving iPhone ASPs(average sales price) during the Q&A session, Apple CEO Tim Cook mentioned that sales in India were up over 400 percent, reports NDTV.
"This means that iPhone sales in India have grown 400 percent. Though, he did not get into specifics related to the iPhone models that contributed to this increase, it's likely that the aggressive marketing and exchange offers on the iPhone 4 run by the company's distributors during the last quarter could be the major reason for this increase", the report said.
The comments by Cook are in line with a comment made in April by Credit Suisse’s research analyst Sunil Tirumalai who sent a note to clients saying, “From our channel checks we believe that iPhone sales are nearing 400,000 units per month in India – that is nearly 3% share of handset sales for a single top-end product in a market that has long been dominated by low-end feature phones.
Apple’s EMI scheme for India began this year in February when it began offering users the latest iPhone 5 (16GB version) for 16,990 down payment plus the option of 6 EMIs at Rs 4,752 per month with zero processing fee or the option of 12 EMIs at the rate of Rs 2,376 per month plus a one time processing fee.
Apple also extended the offer to the iPhone 4S and iPhone 4 devices with a down payment option of Rs 9,990.
For students Apple amped up the offer in May by assuring them Rs 7,777 off on the iPhone 4, and it has even extended its option of buyback to the popular online shopping portal infibeam.
But these massive short term gains for Apple may well have been short lived, in India at least. According to data research firm IDC, Apple’s Q1 in India has seen a 50 percent dip as far in sales numbers.
Another data research firm Canalys told Zdnet that Apple sold 130,000 units in India in Q1 of 2013. Analyst Jessica Kwee put the decline due to seasonal demand and told the website, ‘In terms of demand, first quarter is usually a quieter period for India anyway, especially because of the major holidays in the fourth quarter. Possibly there was some leftover inventory from fourth quarter that got carried over to the first.’
The numbers dip comes as a surprise given that the last quarter had been so positive for Apple in India. With the launch of an attractive EMI scheme on iPhone 5, iPhone 4S and iPhone 4, Apple had seen a surge in numbers with the company grabbing the number two spot in India in terms of revenue. At Firstpost we had previously reported that Apple’s revenue share in India was at 15 percent for Q4 of 2012.
But clearly Apple’s dream run has not lasted until the Q1 of 2013, despite the EMI offer still continuing.
For Apple the fall in India numbers is definitely not good news given that India is now the third largest smartphone market in the world after the US and China, and especially given that it was specifically mentioned as one of Apple's growth markets by Cook.
Back to the drawing board?