Apple, the Cupertino based tech giant has been a key part of the smartphone market in India. Due to the pricing, the Apple iPhones have never been available to the mass market, with most of the premium smartphone buyers eying a new iPhone as their day-to-day smartphone. In 2020, during the crash of the market owing to the COVID-19 pandemic, Apple sales were booming, with the company setting record numbers. According to reports that were published a few days ago, Apple had a record sales quarter, with iPhones shipments crossing 1.5 million units during the October-December period, which also allowed its market share in India to go up to 4%, double from its previous share.
What Does the Company Have to Say?
When the sales numbers were announced, Apple CEO Tim Cook stated: “This is particularly the case in some of the emerging markets where we're proud of how we've done..If you take India for example, we doubled our business last quarter compared to a year ago quarter but our absolute level of business there is still quite low relative to the size of the opportunity."
Talking about the sales numbers in India, Cook said: “We are doing a number of things in the area, we put the online store there for example, and last quarter was the full first quarter of the online store and that has gotten a great reaction to it and has helped us achieve the results that we got to last quarter.
We are also going in there with retail stores in the future and so we look to that to be another great initiative, and we continue to develop the channel as well."
The CFO, Luca Maestri, stated to investors that the revenue growth was likely to accelerate on a YOY basis, with gross margins likely going to be similar to the fiscal first quarter’s rate of 39.7%. To add to his statement, he stated that the services segment faced a tough comparison in 2020.
What Triggered this Sudden Rise?
We cannot pinpoint just one reason for these enhanced sales. Three essential parts played into Apple’s 2020 masterplan. These include the return of a fan favourite, the rise of a new leader and discounts galore.
1. iPhone 12 Series (Aka 5G)
Apple announced the iPhone 12 series late in 2020, with the company focusing entirely on 5G. One might remember the memes that accompanied the launch, considering the number of times 5G was said. That being said, this 5G mentality has aided with sales by a massive amount.
The promise of having a 5G phone is quite attractive and, to the average consumer, who buys a phone in 2-3 years, this seemed like a good option to get great hardware and futureproof oneself at the same time. This has been a major sales boost, not only for Apple but for some other brands as well.
To add to this, the base iPhone, which always made some major compromises, especially in terms of the display has now been matched to the Pro series, with Liquid Retina being phased out. This meant the downgrades that usually accompanied the cheaper iPhone were absent this time around.
Taking a look at this, the base iPhone too was a great option, letting users access the Apple Ecosystem for just a bit cheaper than usual. The 12 Pro series brought in camera advancements, appealing to the pros, with the 12 Pro Max, in particular, being a smartphone liked by most content creators.
2. iPhone SE (The Return of the Chosen One)
For the layman, the iPhone SE is like a bus ticket to the Apple Ecosystem, rather than an expensive flight ticket. Launched back in 2016, the product sold like wildfire, with retailers selling the four-year-old phone, even back in 2020. Apple saw this and noticed the Flagship Killers getting attention, and decided to take the world by storm.
In March 2020, the company launched the iPhone SE 2020 via a press release, and the market went abuzz. The cheap iPhone was back, for users looking to shift to the Ecosystem, this was an opportunity to do so, without going broke.
The iPhone SE did come with some downgrades, such as a Liquid Retina display, the same body as the iPhone 8 and, some other features being cut, such as Face ID being removed in favour of the conventional Touch ID.
The focus on basics, however, was maintained and, this fact, in particular, helped the SE retain its status in the market.
3. Discounts Galore (iPhone 11, XR)
The iPhone 11, which was one of the top sellers in 2020, with the device being the best seller in Q1 of 2020. This, however, was helped due to two reasons. The iPhone 11 was a great device, bringing balance to the price to performance ratio. The sales, however, came due to the amazing discounts being offered on the device.
At certain points in 2020, the iPhone 11 and the XR, both mid-range devices of the Apple lineup were down to Rs 47,999 and 37,999 respectively, making them great deals for the prices. These deals saw the iPhones being sold in such a manner that they would sell out in a matter of minutes, with multiple people buying these devices.
The reason for these sales was that the iPhone 11 and XR, regarded as one of the best value propositions with these discounts, offered a deal too good to decline. Add to this the fact that these devices have support for 3-4 years, meaning that once someone spends Rs 37,000 or Rs 47,000, they can last the phone for a long amount of time, something that is not available even in 2021 in most phones below the Rs 50,000 segment.