(Bloomberg) -- Apple Inc.’s sales in India hit a new high of almost $6 billion in the year through March, highlighting the market’s increasing importance for the iPhone maker as Chief Executive Officer Tim Cook arrives in the country to open its first local stores.
Revenue in India grew by nearly 50%, from $4.1 billion a year earlier, according to a person familiar with the matter, who asked not to be named as the information is not public. Apple is scheduled to post quarterly earnings on May 4 and has signaled it expects total global revenue to decline.
Cook is set to inaugurate India’s first Apple stores this week, seeking to accelerate growth in a country of 1.4 billion where the company’s smartphones and computers have never held more than a minuscule market share due to their high cost. With tech demand slowing globally, Apple has identified India’s expanding middle class as an attractive opportunity and it’s also adding local production at an increasing rate.
Apple, which has thus far relied on retail partners and online sales in India, didn’t respond to a request for comment.
The company launched its online store in India in 2020 and its sales drive is set for a boost as it opens its first local store Tuesday in an upscale business district in the financial hub of Mumbai. Two days later, it plans to open an outlet in the capital, New Delhi.
Apple’s India sales surged during the pandemic as customers bought iPhones, iPads and MacBooks to work and study from home. And that momentum has continued, helped by financing and trade-in options.
“Apple sales in India are typically driven by iPhones and wearable devices, but over the past two years its MacBook enterprise business has also started gaining steam,” said Navkendar Singh, an analyst at researcher IDC. “We can expect Apple to push hard on its sales and marketing levers to continue the surge in sales.”
Yet its base is small — just about 4% of India’s nearly 700 million smartphone users have iPhones — as the world’s second-biggest mobile market is led by cheaper local brands as well as Chinese and South Korean manufacturers. But the Cupertino, California-based company ranked No. 1 in unit sales of devices above $365 last year, according to researcher Counterpoint.
Apple’s stores serve as key retail and showcase points for the world’s most valuable company, while also often becoming tourist hotspots. Critically, the new India stores will also double as support centers, a potential selling point because it makes product returns and repairs easier.
The company doesn’t break out India revenue in its earnings statements, but it is required to report annual sales in the country to local authorities. For the year through March 2022, it posted sales of 333.8 billion rupees ($4.1 billion).
While that’s less than 2% of Apple’s global revenue, the market’s significance is growing and the company is also expanding its local manufacturing footprint. Apple tripled its production to more than $7 billion of iPhones in India last fiscal year, part of an effort to reduce its reliance on China as tensions between Washington and Beijing continue to escalate.
Cook’s India push also means braving risks such as India’s notoriously high import duties for everything from components to finished products, which affect retail prices and demand. The country is also known for sudden shifts in rules and regulations, which can expose companies to unexpected costs. Yet the market’s growth potential makes it difficult to ignore.
“India is a hugely exciting market for us and is a major focus,” Cook said during an earnings call in February. “We’re putting a lot of emphasis on the market.”
--With assistance from Mark Gurman.
(Updates with comment from analyst in seventh paragraph)
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