Weak rupee, import duties resulting in flat India sales for Apple: CEO Cook

Weak rupee, import duties resulting in flat India sales for Apple: CEO Cook
Tim Cook, CEO, Apple Inc   |  Photo Credit: Photo Credit: Reuters
2 Nov, 2018

The rupee depreciation and import duties have made Apple product imports costlier, resulting in flat sales in India, chief executive Tim Cook told investors after the quarterly results. He added that, despite all this, the company remained bullish on the country and other emerging markets.

For now, India accounts for less than two per cent of Apple’s overall global revenue.

Cook said that the company had to raise prices and the market was not growing the way Apple would have liked it to. He added that the company was engaged in discussions with the Indian government to open its own retail outlets. 

"We have had really great productive discussions with the Indian government and I fully expect that, at some point, they will agree to allow us to bring our stores into the country. We do manufacture some of the entry-level iPhones in India and that project has gone well. I am a big believer in India," Cook said in a call with investors.
Apple's latest smartphones are not yet made in India and the import duties on Apple devices are also hurting sales. "There are import duties in some or most of the product categories that we're in. In some cases, they compound and this is an area that we're giving lots of feedback on," he added.

The company has seen good growth in Mac computers and iPads in India and other emerging markets, the company said. Apple's September quarter global revenue of $53.3 billion beat market expectations.

Cook said that the currency challenges are small speed bumps in a long journey in India and he was bullish on the market over the long term. 

"Over the long term, there is a huge number of people that will move into the middle class. The government has really focused on reform in a major way and made some very bold moves and I applaud them for doing that, and sort of can't wait for the future there," Cook said.

Apple, however, does face other challenges in India, such as a strong Android market even among high-end smartphones with Samsung, Google's Pixel and OnePlus doing extremely well. Apple’s market share was around 34% in the high-end category during the September quarter, according to Cybermedia Research.

In the recent quarters, OnePlus has emerged as the top brand in the premium category -- above $400 -- in India. While Apple's latest high-end phones could cost anywhere between Rs 70,000 to Rs 1 lakh, the older models are often available in Rs 20,000 to Rs 50,000 range.

Apple, which started manufacturing entry-level iPhones in India one year ago, has cut the price of some of its older and cheaper models. Most of the iPhone SEs Apple sold in India were manufactured in its Bengaluru plant, run by Taiwanese contract manufacturer Wistron Corp.