Apple (AAPL) is gaining smartphone market share in India, an emerging geographic area that could be the next boon for the iPhone maker.
"Apple is riding this 'premiumization' wave, reaching record shares in multiple new markets which are typically not considered its core markets. A prime example is India, where it grew 50% YoY in Q2 2023," according to Counterpoint Research data.
The report shows the overall cell phone market is experiencing declines as consumers wait longer to upgrade or buy refurbished devices. However, Apple's premium status is helping it gain customers who are "opting for a superior experience, supported by the easy availability of finance options across key geographies."
The report comes on the heels of a recent Morgan Stanley analysis showing the potential of a massive upside in India, which accounted for only 2% of Apple’s revenue growth over the last five years.
"We are bullish on India as an emerging growth driver for Apple, and forecast the country accounting for 15% of Apple's revenue growth and 20% of installed base growth over the next 5 years," wrote Erik Woodring and his team of analysts.
The tech giant's one-year sales in India reached an estimated $6 billion through March, a 50% year-over-year increase.
The macro backdrop in India "is more favorable for Apple than it's ever been, with years of economic reform, a growing local manufacturing base, and improving electrification/digitization of the economy," wrote Morgan Stanley’s analysts.
Recent figures show only about 4% of India’s nearly 700 million smartphone users carry iPhones. A major barrier has been Apple’s price point. However, a growing middle class is helping change that.
"There are a lot of people coming into the middle class, and I really feel that India is at a tipping point," Apple CEO Tim Cook told analysts on its May 4 earnings call. "And the dynamism in the market. The vibrancy is unbelievable."
In April, CEO Tim Cook unveiled the brand’s first flagship retail store in the country.
The market share push coincides with the tech giant’s expansion into India's local manufacturing. The country makes only about 6% of the iPhones globally — a tiny percentage compared to China, where the vast majority of Apple products are manufactured.
That trend is rapidly changing, though, as Apple is starting to diversify its production amid rising tensions between Beijing and Washington.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on Twitter at @ines_ferre.
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