Tim Cook pleased with Apple’s double-digit growth in India despite overall sales dip

AppleCEO Tim Cook expressed being “very, very pleased” with the company’s strong double-digit growth in India as it set a new March quarter revenue record in the country, despite a decline in overall sales for the quarter.

Meanwhile, Apple saw a 7% rise in its shares during extended trading as it announced that its Board has authorised an additional $110 billion for share repurchases—the largest buyback in the company’s history—alongside a 4% increase in cash dividends.

Commenting on India’s growth, Cook said, “I see it (India) as an incredibly exciting market and it’s a major focus for us. In terms of the operational side or supply chain side, we are producing there. From a pragmatic point of view, you need to produce there to be competitive.” 

Apple’s growth in India contrasts with an 8% decline in net sales in Greater China in the March-ended quarter.

“China is by far the largest emerging market that we have. But when we started looking at places like India...the numbers are getting large, and we are very happy because these are markets where our market share is low, the populations are large and growing,” Luca Maestri, Chief Financial Officer of Apple, noted during the earnings call.

Globally, Apple reported a decrease in both revenue and profit in the second quarter of the financial year ended March 30, 2024.

In the second quarter, Apple’s net profit fell to $23.6 billion, down 2.2% compared to the same period in the previous fiscal year, and the company’s revenue saw a 4.3% drop to $90.7 billion, as opposed to $94.8 billion in the year-ago period.

Discussing the second-quarter performance, Cook said, “In the March quarter a year ago, we were able to replenish iPhone channel inventory and fulfil significant pent-up demand from the December quarter COVID-related supply disruptions on the iPhone 14 Pro and 14 Pro Max.” 

Apple estimates that this “one-time impact added close to $5 billion” to the March quarter revenue last year, he said, adding that removing this one-time impact from the revenue of the previous year, implies that the revenue for the March quarter of the current year would have grown.

iPhone and services revenue 

Apple’s flagship smartphones have been the driving force behind the company’s sales. However, in the March ended quarter, iPhone sales experienced a setback. iPhone revenue dropped 10.5% to $46 billion in the second quarter from $51.3 billion in the year-ago period.

The iPhone maker’s shipments fell by 9.6% year-over-year to 50.1 million units in the March quarter, losing its top market share position to Samsung, which holds 20.8% compared to Apple’s 17.3%, according to IDC data.

Maestri said that adjusting for the one-time impact, iPhone revenue would be roughly flat to last year.

Meanwhile, revenue from services set an all-time revenue record of $23.9 billion—up 14.2% year-over-year—with record performance in both developed and emerging markets.

Revenue from Mac products grew 4% year-over-year to $7.5 billion, “driven by the strength of the new MacBook Air, powered by the M3 chip”.

Last October, Apple launched its M3 chip family, including the M3, M3 Pro, and M3 Max, featuring a next-generation GPU architecture, enhanced CPU, and Neural Engine.

“Our Mac installed base reached an all-time high with half of our MacBook Air buyers during the quarter being new to Mac, Maestri noted.

Apple’s iPad sales fell by 17% year-over-year, and the wearables, home, and accessories category dipped by 9.6% compared to the previous fiscal year.

“iPad continued to face a challenging compare against the launch of the M2 iPad Pro and iPad 10th Generation from last year,” Maestri explained.

Speaking about Apple’s mixed reality headset Vision Pro, which was launched in the quarter, Cook said that there’s enthusiasm from the enterprise market as well.

“More than half of the Fortune 100 companies have already bought Apple Vision Pro units and are exploring innovative ways to use it to do things that were not possible before, and this is just the beginning,” he added.

Generative AI

Apple sees Generative AI (GenAI) as a very key opportunity across its products and believes it has advantages that set it apart, according to Cook.

“We continue to feel very bullish about our opportunity in Generative AI. We are making significant investments, and we are looking forward to sharing some very exciting things with our customers soon. We believe in the transformative power and promise of AI, and we believe we have advantages that will differentiate us in this new era,” he added.

Giving an outlook for the ongoing quarter, Maestri said that Apple expects its June quarter total revenue to grow low-single-digits year-over-year. 

“We expect our services business to grow double-digits at a rate similar to the growth we reported for the first half of the fiscal year. And we expect iPad revenue to grow double-digits,” the CFO added.

Apple has not provided revenue guidance since 2020 citing uncertainty.