Apple’s annual sales in India have risen to a record of almost $8bn after jumping 33% in the year through March, as the company looks to diversify its business out of China.
Sales of Apple’s flagship iPhones made up over half of the sales in the country, Bloomberg reported, citing someone familiar with the matter.
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The increased sales highlight the iPhone maker’s success in a country dominated by more affordable Chinese devices using Google’s Android mobile operating system.
Apple’s success in India has corresponded with the population’s increased purchasing power as the country’s economy improves.
India took over China as the world’s most populated country in 2022, making it a huge potential market for Apple.
However, iPhones currently make up just 3.5% of the country’s total smartphones, according to Counterpoint Research. India is also currently dominated by much cheaper Chinese phones.
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By GlobalDataApple has also been attempting to expand its manufacturing dominance in India.
In October, the Indian Minister of State for Electronics and IT, Rajeev Chandrasekhar, announced that Tata Group would begin manufacturing iPhones in the country for local and global markets.
The announcement followed Wistron, a contract manufacturer of Apple products, agreeing to sell its facility in Karnataka to Tata Electronics.
The agreement signalled a strengthening in India’s attempts to develop domestic competitors to China’s stranglehold in the electronics industry, which continues to be threatened by strained relations with the US.
Apple’s diversification away from China continues
China’s affluent consumer base has been a critical driver for Apple’s revenue and brand growth for years. According to McKinsey, Chinese consumers will account for about 40% of global spending on luxury goods by 2025. Keeping China as a vital market for Apple in the future.
However, Apple has been looking to expand its business in other countries to diversify its revenue sources away from China.
In the latest fiscal year, Apple’s revenue in China decreased to $72.6bn as the economy suffered a slowdown. Despite iPhone sales recently beginning to grow in China again, the US and China trade war has pushed global tech companies like Apple to move out of the country.
However, according to research and analysis company GlobalData, a complete decoupling of supply chains from China is virtually impossible.
Most countries do not offer China-like infrastructure, skilled labour, and governmental support. In addition to this, many components for Apple devices such as circuit boards, display panels, chargers and batteries are manufactured in China.
The US Commerce Department issued rules in 2022 which clamped down on the export of certain advanced chips, including those with military or AI application, to Chinese companies.
