Tim Cook explains reasons behind slow iPhone sales in emerging markets like India

Apple's CEO Tim Cook blames weak macro-conditions and foreign exchange as key factors behind slow iPhone sales


Apple’ CEO Tim Cook announced the company’s earnings call for the first quarter yesterday with analysts but he somehow missed mentioning India anywhere in his call. This was odd as Cook has been speaking about Apple's performance in India in his earlier quarterly earning calls.

Tim Cook explains reasons behind slow iPhone sales in emerging markets like India

Apple notes foreign exchange as one of the key factors behind slow iPhone sales in India. Image: Reuters

However, Cook did explain the factors behind the struggle in iPhone sales in emerging markets — which applies to India. The CEO pointed out that “weak macro-conditions” in certain emerging markets were more severe than what the company ‘foresaw’ in China. Foreign exchange is another key factor behind the slow iPhone sales, Cook said.

"The relative strength of the US dollar has made our products more expensive in many parts of the world. The foreign exchange issues amplified the differences in international markets, in particular, the emerging markets which tended to move much more significantly versus the dollar," Cook said.

Notably, as per the stats shared by Apple in its earnings call, iPhone sales revenue fell by 15 percent during the first quarter, although the active installed base of Apple devices hit a milestone of 1.4 billion in Q1 2019. While there is intense pressure on iPhone sales and numbers, Cook noted, “iPhone subsidies are becoming increasingly less common,”  according to an IANS report.

He further confessed that Apple’s battery replacement programme made it inexpensive and efficient to replace the battery for ‘millions of customers’ and hold onto their existing iPhones for a longer period.

Apparently, Apple’s issues in China are increasing the pressure on the company to find ‘way to grow’ in India. The Cupertino tech company has urged for tax relief and other incentives from the Indian government to begin assembling high-end iPhones and open its official stores in the country.

India is the world’s second largest smartphone market after China. But while tech companies such as Xiaomi and Samsung have managed to capture a good share in the Indian market, Apple is still facing an ‘uphill battle’ with a reported market share of just 2 percent. As per report, tariffs on imported smartphones and weakness of Indian currency against the US dollar have affected iPhone sales in the country.

Fresh reports suggest that Apple is considering the expansion of local production and include the latest iPhone models. As per a CNN Business report Foxconn is planning to start manufacturing iPhone X models at its plant in Tamil Nadu this year. The report points out that this move would likely allow the company to avoid the country’s import taxes on iPhone and ‘potentially’ reduce the expensive price point. Apple has reportedly begun reducing the price of the iPhone for third-party distributors in China and the company is expected to make a similar move in India.