Tim Cook says ‘lots of positives’ in India as Apple hits all-time revenue record in the country

AppleCEO Tim Cook said there are “lots of positives” in India as the iPhone maker achieved an all-time revenue record in the country, despite experiencing a decline in overall sales for the fourth consecutive quarter.

The tech giant saw “very strong, double digit” growth in India, Cook noted, adding, “It’s an incredibly exciting market for us and a major focus of ours.”

Commenting on India’s growth momentum versus China during the fourth-quarter earnings call, Cook explained, “...each country has its own journey, and I wouldn’t want to play the comparison game, but we see an extraordinary market, a lot of people moving into the middle class, distribution is getting better.”

Earlier this year, the iPhone maker opened its first two Apple stores in India, in Mumbai and Delhi. Cook highlighted that the stores are doing better than the firm anticipated.

“It’s still early going, but they’re off to a good start, and I couldn’t be happier with how things are going at the moment,” he added.

Globally, Apple reported stronger-than-expected performance both in terms of revenue and profit in the fourth quarter of the financial year ended September 30, 2023, driven by sales from iPhone and services.

In the most recent fiscal quarter, Apple’s net profit surged to $22.9 billion, up 10.8% compared to the same period in the previous fiscal year, although the company’s revenue saw a marginal decrease, amounting to $89.5 billion, as opposed to $90.1 billion in the year-ago period.

The tech giant wrapped up FY23 with a revenue of $383.3 billion, showing a 2.8% year-over-year decline, and a net profit of $97 billion, also 2.8% lower than the preceding fiscal year.

Discussing the factors impacting its fourth-quarter performance, Cook noted, “We continue to face an uneven macroeconomic environment, including foreign exchange headwinds, and we’ve navigated these challenges by following the same principles that have always guided us. We’ve continued to invest in the future and manage for the long term.”

iPhone and services revenue

Apple’s flagship smartphones have been the driving force behind the company’s sales, and in the fourth quarter, iPhone sales significantly contributed to the firm’s revenue, with services revenue helping to offset the decline in Mac, iPad, wearables, home, and accessories sales.

Its iPhone revenue rose 2.8% to $43.8 billion in the fourth quarter from $42.6 billion in the year-ago period.

“iPhone revenue came in ahead of our expectations, setting a September quarter record, as well as quarterly records in many markets, including China mainland, Latin America, the Middle East, South Asia, and an all-time record in India,” Cook said.

Earlier this year, the tech giant revealed its latest smartphone lineup, including the iPhone 15 Pro, iPhone 15 Pro Max, iPhone 15, and iPhone 15 Plus.

Meanwhile, revenue from services set an all-time high with double-digit growth, surpassing Apple’s expectations at $22.3 billion for the quarter, representing a 16.3% year-over-year increase.

Revenue from Mac products declined 33.8% to $7.6 billion, “driven by challenging market conditions” and “compounded by a difficult compare in our own business”, said Luca Maestri, Chief Financial Officer of Apple.

He explained, “Last year, we experienced supply disruptions from factory shutdowns in the June quarter, and were subsequently able to fulfil significant pent-up demand during the September quarter.”

The company is excited about the recently announced iMac and MacBook Pro powered by the M3 chips, Maestri added.

Apple’s iPad sales fell by 10% year-over-year, and the wearables, home, and accessories category dipped by 3.4% compared to the previous fiscal year.

Overall, sales from Apple products amounted to $67.2 billion, representing a 5.3% decrease from the $70.9 billion reported in the year-ago period.

Outlook

Despite having one less week this year, Apple expects the December quarter total company revenue to be similar to last year, as per Maestri.

“We expect iPhone revenue to grow year-over-year on an absolute basis. We also expect to grow after normalising for both last year’s supply disruptions and the one extra week,” he said.

Apple’s CFO noted that Mac is expected to experience a significant year-over-year performance boost from the September quarter, while the year-over-year revenue performance for both iPad and wearables, home, and accessories is anticipated to significantly decelerate during the same period “due to a different timing of product launches”.

Apple has not provided revenue guidance since 2020 citing uncertainty.