Apple’s fantastic 2020 in India had much to do with cancelled foreign holidays

The sharp growth is being attributed to the fact that Indians could not source iPhones from other countries, where it is much cheaper. …

The Covid-19 pandemic turned out pretty advantageous for Apple in India.

In the last quarter of 2020, iPhone sales in the world’s second-largest smartphone market nearly doubled compared to the previous year, data from Hong Kong-based Counterpoint Research show. This was the first time that the smartphone brand crossed 1.5 million in shipments in a single quarter.

During the year 2020, the Cupertino-based manufacturer sold 93% more phones in India.

The sharp growth is being attributed to the fact that Indians could not source iPhones from other countries, where it is much cheaper. Typically, around 10-12% of iPhone owners in India buy their devices abroad either during their travels or by asking friends and family to get the smartphone for them.

But with much of the world in lockdown for the most part of 2020, such purchases were naturally fewer. Consequently, there was pent-up demand in the second half of the year, said Navkendar Singh, research director with International Data Corporation India.

From travel to iPhones

Consumers have a good reason to buy their iPhones outside India. The device can cost as much as 40% lower in certain countries not just because of a lower selling price but also due to lesser taxation.

Another factor that led to higher iPhone sales was that people had more disposable income during 2020 as they were stuck indoors with not many avenues to spend. It was an added bonus that online retailers like Amazon and Flipkart offered deep discounts on iPhones on various occasions throughout the year.

“We believe this growth is a result of factors like aggressive promotions, due to lockdown limited opportunities for a customer to spend on luxury items like expensive clothes, parties, and vacations, who end up spending on accessories,” Pavel Naiya, research analyst at Counterpoint, told Quartz.

Star devices

After a difficult patch, Apple managed to pull itself out of a funk in India with the iPhone 11 launch in September 2019.

“Apple also started to rethink its India strategy and started investing more in the Make-In-India programme to bring down its device prices,” said Naiya.

The locally-manufactured iPhone SE, priced starting at Rs16,999 ($235), has been a big hit and a third-generation of the cheaper iPhone variant is already in the works. Furthermore, the iPhone 12 will reportedly be manufactured in India soon.

What has also helped the company is the revamp of its sales strategy in India.

Apple’s online store, launched in India in the second half of 2020, has contributed significantly to its doubling market share in India’s premium smartphone segment to 4%, CEO Tim Cook said this January. And seeing this success, Apple’s long-awaited retail stores are also on their way, he added.

Of course, the journey hasn’t been devoid of hiccups. In December, workers at Apple’s Wistron manufacturing facility in the outskirts of Bengaluru revolted over being underpaid and overworked. However, the Silicon Valley behemoth quickly rectified the situation. By Feb. 9, Wistron said it had resolved matters, put new hiring and payroll systems in place, and was ready to reopen.

The question now is whether Apple’s growth will be sustained even after the vaccine is widely distributed and borders start opening. Experts believe it will be, depending on its future portfolio and promotional strategy.

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