The Indian unit of Apple more than doubled its profit in the year ended March 2018, but sales grew at a slower pace which analysts attributed to weakened demand for iPhone models after their prices went up in January due higher import duties, and Chinese aggression in the premium smartphone segment.
Apple posted a 12% increase in total income to Rs 13,097.64 crore in India in the last fiscal year, compared with Rs 11,704.32 crore the previous year, as per its latest filings with the Registrar of Companies. Net profit jumped to Rs 896.33 crore from Rs 373.38 crore, which the industry attributed to the high margin on the iPhone X and Mac computers.
Increased sales of the iPhone 7 and 6 that are priced relatively higher compared with the iPhone 6 and 5S a year back also boosted profitability, said Tarun Pathak, associate director at Hong Kong-based market tracker Counterpoint Research. “This pushed up iPhone’s average selling price in India,” he said.
Apple did not attribute any reason behind its financial performance in the filings. An email sent to Apple India did not elicit any response till Friday press time. Apple chief executive Tim Cook had highlighted during the last few quarterly earning calls on how the Mac computers were growing at a record pace in India, boosting overall growth rate in the country.
The numbers also indicate that Chinese manufacturers Xiaomi and BBK Electronics Corp, which owns the Oppo, Vivo and OnePlus brands, have comfortably outpaced Apple in the Indian market last fiscal year.
Xiaomi Technology India posted Rs 22,947.27 crore of India revenue in FY18, while for the local unit of BBK Electronics, it was Rs 23,173 crore for Oppo and Vivo combined. Details on OnePlus sales in India are not yet available.
A year ago, Xiaomi was lagging behind Apple with revenue of Rs 8,334.4 crore. BBK Electronics had overtaken Apple India last year too, but by a smaller margin at Rs 14,343 crore.
In fiscal 2017, Samsung had led the market with smartphone sales of Rs 34,261 crore and Chinese smartphone and laptop maker Lenovo India had reported Rs 11,950 crore. The FY18 numbers of Samsung and Lenovo India are not yet available.
The industry expects Apple India’s profit growth to continue outpacing revenue even in the current fiscal year with new country head Michel Coulomb restructuring its sales and distribution strategy. He took charge last December from Sanjay Kaul, who was pushing sales largely through online discounting.
Coulomb has realigned the strategy to reduce discounting throughout the year. He cut down on the number of distributors, stopped the rapid expansion into neighbourhood stores and is trying to ensure higher sales from exclusive Apple brand stores.