Tim Cook 'very bullish on India' as Apple sets quarterly revenue record in the country

Apple CEO Tim Cook said he is “very bullish on India” as the iPhone maker set a quarterly revenue record in the country. However, it missed revenue and profit expectations for the quarter ended December 31, 2022.

“India is a hugely exciting market for us and a major focus. We brought the online store there in 2020. We will soon bring Apple Retail there. We are putting a lot of emphasis on the market. There’s been a lot going from financing options and trade-ins to make products more affordable and give people more options to buy,” the Apple chief noted.

The tech firm’s December quarter revenue was $117.2 billion, down 5% year over year, and below analysts’ estimates of $121.10 billion, according to Refinitiv data. Its net income for the quarter was $29.9 billion (or $1.88 per share), down 13.6% over last year, and under analysts’ expectations of $1.94 per share, according to Refinitiv estimates.

Discussing the three factors impacting the company’s Q1 revenue performance during an earnings call, Cook noted that foreign exchange headwinds had a nearly 800 basis point impact, and COVID-19-related challenges impacted the supply of iPhone 14 Pro and iPhone 14 Pro Max, which lasted through most of December. 

“The third factor was a challenging macroeconomic environment as the world continues to face unprecedented circumstances from inflation, to war in Eastern Europe, to the enduring impacts of the pandemic,” he added.

Despite the challenges, Apple saw strong growth in several emerging markets, including all-time iPhone revenue records for India, Cook said, adding that the firm witnessed very strong double digits year-over-year growth in the country.

“We actually did fairly well through COVID in India. And I'm even more bullish now on the other side of it, or hopefully, on the other side of it. And that's the reason why we're investing there,” Cook noted.

ALSO READ

Apple looks to scale up manufacturing in India: Piyush Goyal

Apple’s flagship smartphones have been driving the iPhone maker's sales. Its iPhone revenue dropped to $65.8 billion in the first quarter from $71.6 billion in the year-ago period. This dip in sales was expected as Apple had warned in November that iPhone 14 Pro and Pro Max shipments would be impacted by pandemic-fueled production constraints in China.

While overall iPhone sales lowered, and the products (including Mac and iPad) revenue was $96.4 billion, down 8% from last year, the revenue from services rose during the quarter. “We set an all-time revenue record of $20.8 billion in our Services business,” Luca Maestri, Chief Financial Officer of Apple, said in a statement.

During the December quarter, Apple’s installed base crossed two billion active devices, and hit an all-time high for all major product categories, according to the company.

Outlook

Apple expects its March quarter year-over-year revenue performance to be similar to the December quarter, Maestri said and added that foreign exchange will continue to be a headwind, and the company expects a negative year-over-year impact of five percentage points. 

“For services, we expect revenue to grow year over year while continuing to face macroeconomic headwinds in areas such as digital advertising and mobile gaming. For iPhone, we expect our March quarter year-over-year revenue performance to accelerate relative to the December quarter year-over-year revenue performance,” he stated.

He added that for Mac and iPad, Apple expects revenue for both product categories to decline double digits year over year because of challenging compares and macroeconomic headwinds. 

Apple has not provided revenue guidance since 2020 citing uncertainty.

(The copy was updated to correct a factual error)