During the earnings call presenting the Q2 2017 financial report of Apple, Apple's future plans for India came up persistently during the interaction with analysts. Apple accepted that the penetration of the premium handset in the emerging market was marginal, but was hopeful over future prospects considering the massive 4G rollout in India. The availability of high-quality mobile connectivity is an important factor in how the iPhones are designed to be used, and Tim Cook had previously been considering the lack of communications infrastructure as a roadblock for Apple's plans to expand in India.
The first time India came up during the call was when Tim Cook himself gave a brief overview of Apple's plans for India, just after disclosing the outlook for China. Some of the topics covered included Apple engaging with developers in the country. Apple started manufacturing the iPhone SE in limited quantities in India, but the device does not enjoy a price drop despite the local manufacturing. However, Apple's investment in India is a minute fraction of the amount it has invested in China.
Tim Cook was optimistic about the prospects of the company in India. "We set a new March quarter record for India, where revenue grew by strong double digits. We continue to strengthen our local presence across the entire ecosystem, and we're very optimistic about our future in this remarkable country with its very large, young, and tech-savvy population, fast-growing economy, and improving 4G network infrastructure," Cook said during the call.
In a response to a question posed by a Goldman Sachs analyst on how many iPhones Apple expects to sell over the course of a year in India. Cook responded, "We have a ton of energy going into the country on a number of fronts, and it is the third largest smartphone market in the world today behind China and the United States. And so we believe, particularly now that the 4G infrastructure is going in the country and is continuing to be expanded, that there is a huge opportunity for Apple there. And so that and the demographics of the country is why we're putting so much energy there."
The iPhone SE is a low-cost device, and despite the availability in India, the response has been lukewarm. Analysts pointed out that the iPhone was underrepresented in the country, and Tim Cook agreed. An analyst from Citi asked if Apple was underrepresented in India, and if Tim Cook saw the next year as a kind of turning point for Apple in India. Cook agreed that Apple was underrepresented in India, and that he was excited about the future prospects of Apple in India, "The 4G network investment really began rolling in in a significant way toward the last quarter of last year, as you know. But they are moving fast. They're moving at a speed that I have not seen in any other country in the world once they were started, and it is truly impressive."
Apple sees a bright future ahead for itself in India, and one of the most important reasons for this is the build up of 4G infrastructure. Apple has posted the results on its news site, and the transcript of the earnings call is available on Seeking Alpha. The conference call to discuss the results of the third fiscal quarter is scheduled for 1 August.
Published Date: Jul 27, 2017 23:37 PM | Updated Date: Jul 28, 2017 00:41 AM