Apple iPhone Sales Up In India, Cook Says ‘Jai Ho’ To R-Jio
Everything that Apple does in the smartphone bazaar makes news. In fact, everything that it fails to do makes even bigger news, and not without reason. The launch of the iPhone 7 was probably as low key as it could get. That’s because the features that rumor mills hatched before the launch and were found missing made the bigger news.
When the company announced that iPhone sales were dipping (we are not even referring to the iPhone 6 and the iPhone 6S), all hell broke lose and doomsday predictions made headlines. Apple’s honeymoon with users is over; Why would anyone buy the iPhone 7 and the iPhone 7 Plus? – The writing was on the wall.
However, barely a month after the launch, and on the eve of another important day in Apple’s life (the launch of the new MacBook happens in a day), reports suggest that the iPhone 7 is selling fast and the iPhone 7 Plus is sold out.
There is a Supply Gap
During a call with investors to discuss fourth-quarter earnings, CEO Tim Cook reportedly said he was unsure whether the company can keep up with the pace of demand for the iPhone 7 Plus.
“It’s hard to say,” Cook said in response to an investor question about whether the iPhone would hit supply/demand equilibrium by the end of the next quarter. “I believe that on iPhone 7 we will, on iPhone 7 Plus I’m not sure. I wouldn’t say yes at this point because the underlying demand looks extremely strong on both products but particularly on the iPhone 7 Plus vs our forecast going into the product launch,” Cook was quoted as saying in an article on TechCrunch.com (Read it here).
The article goes on to point out that the iPhone 7 Plus is seeing massive shipping delays because its demand has drastically outstripped its supply. “If you try to go purchase an iPhone 7 Plus, the shipping delay may be as high as several weeks. Apple is frantically trying to make as many iPhone 7 Plus phones as it can, and it’s going to be critical that it finds a way to meet that demand,” it says.
Given that the holiday quarter is when the most sales happen for Apple, this could just become a make or break quarter for Tim Cook, who badly needs the growth graph from the smartphone business to stop it’s downward move and show at least some small signs of moving back up north.
Why it is Important:
Since releasing the iPhone 7 in September, Apple stock has gone up nearly 10 percent, the best it has achieved this year. Quarterly revenues stood at USD 46.9 billion for the third quarter as against USD 51.5 billion a year ago. The company beat analyst estimates on both earnings per share and total iPhone sales – albeit by the smallest of margins (Read the results statement).
Across the board, the numbers weren’t particularly impressive. In fact, most would argue that they were following the regulation path – at last since the past two or three quarters. Amidst all this, the silver lining was that Apple issued a revenue guidance that was USD 2 billion higher than expected. Of course, the stock markets immediately discounted this with shares closing 2 percent down.
Another aspect that stood out was Tim Cook’s confident boast about the latest iPhone series and the Apple Watch Series. “Our strong September quarter results cap a very successful fiscal 2016 for Apple,” Cook said adding, “We’re thrilled with the customer response to iPhone 7, iPhone 7 Plus and Apple Watch Series 2, as well as the incredible momentum of our Services business, where revenue grew 24 percent to set another all-time record.”
Can India be the savior?
Compared with a year ago, Apple revenues are up in Europe and Japan, while down in China and the Americas. China especially should be a worry for Apple with sales declining by 30 percent year over year. In the United States too, there has been a slowdown, though analysts attribute it to saturation in the smartphone market itself.
For the record, iPhone sales grew by 50 percent year on year over the past 12 months ended 2016. Small wonder then that Cook is excited about the new market and the investments that have gone into the 4G networks around the country, especially from Reliance-Jio which is now offering the iPhone 7 bunched scheme.
In fact, Tim Cook has already decided that India could well become as big as China when it comes to sale of the iconic phones. Of course, it remains to be seen how Apple’s competitors, who control the Indian market, react to this development.
“Reliance Jio is rolling out a first of its kind all-IP network in India with 4G coverage in 18,000 cities and 200,000 villages across the country. They’re offering a free year of service to purchasers of new iPhones and we’re partnering with them to ensure great iPhone performance on their network,” he said in the statement.
Now it remains to be seen what other manufacturers do? Till now, these companies led by Samsung at the top end and the local brands like Micromax, have managed to leave just about two per cent share of the Indian smartphone pie to the Cupertino-based technology major.
Of course, there are those who might just ask the question: “Will Mukesh Ambani rescue Tim Cook?”
Or should we become adventurous and ask: “Would Mukesh Ambani like to have an Apple for breakfast some time soon?”
(The author is the Chief Content Officer at Trivone Digital Services. In his spare time, he works as a leadership coach, corporate trainer, and an NLP Counselor)
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