Motley Fool Falls in Love with Apple + India

11 AUGUST 2022 - Interesting story on The Motley Fool on Wednesday. Under the headline, “1 Emerging Catalyst That Apple Investors May Have Missed,” the piece points out that, in the June-quarter, Apple sales “nearly doubled” in India.

Of course, anyone listening to the June-quarter earnings call would not, nay could not have missed that. Apple CEO Tim Cook mentioned it in his prepared remarks. Apple CFO Luca Maestri mentioned it in his prepared remarks. Apple CEO Tim Cook mentioned it again in a question and answer bout with Morgan Stanley analyst Erik Woodring.

Also, there’s some podcaster who keeps bringing it up.

What’s cool about the Fool - they’ve got numbers. Guesstimates put Apple’s revenue from Indian operations at ~US$3B in FY21. That’s expected to rise to ~US$4B in FY22. Kind of small potatoes compared to the $392B or so in revenue Apple’s expected to pull in in FY22 - but, you know… growth! And a good trajectory. The piece says the average selling price of a smartphone in India is US$211. The least expensive iPhone in India is US$533. And yet, there’s Apple making more money. Smartphone ASPs are said to be on the rise, and guess who’ll be there, waiting with open arms!

While the appetite for higher priced phones may be growing in India, Apple is working to make them more accessible. The Motley Fool piece points to Apple producing iPhone 13 there now. There was also a report last week that Apple and Foxconn plan to produce iPhone 14 in India at launch, rather than the country having to wait a quarter or two as it has in the past. Producing and selling iPhone in India eliminates import tariffs. That lowers the cost to consumers, and that should generate more sales.

Additionally, 5G is really just getting started in India. Motley Fool has Ericsson estimating that the country could be cranking through 500-million 5G phones a year by 2027. With the population at 1.3-billion, half-a-billion 5G phones per-year sounds kind of high. Even if the growth’s not that robust though, growth! “Apple's strong position in the premium end of the Indian smartphone market means that it is well placed to take advantage of this opportunity,” according to the Fool.

While the piece focuses on iPhone for India, iPhone is likely just the beginning. As CEO Cook told Morgan Stanley’s Woodring, “iPhone tends to be the engine for [markets like India], particularly at the beginning of creating the market there for Apple products.”