India is poised to become Apple’s third-largest market by 2026, behind only the US and China, with local sales expected to grow by as much as 20% in the coming year. This growth is part of Apple’s broader strategy to refocus its efforts on emerging markets, particularly in India, as it faces a decline in market share in China due to the resurgence of local competitor Huawei. At present, India ranks as Apple’s fifth-largest market, following Japan and the UK. However, India’s rapidly expanding middle class and rising disposable incomes are driving an increasing shift towards premium products, providing significant opportunities for Apple.

Several factors are contributing to Apple’s growing market share in India. Financing options for consumers, such as installment plans, have made Apple’s premium devices more accessible to a larger section of the population. Additionally, the festive season discounts have further spurred sales. There is also a clear consumer shift toward premium devices, as more Indians are willing to invest in high-end smartphones in line with rising incomes and greater purchasing power. By the end of 2024, Apple is expected to have shipped over 12 million iPhones to India, a notable increase from the 8.5 million shipped in 2023. With strong sales of the latest iPhone models, the company is anticipated to ship an additional 4 million units in the December quarter alone.

In contrast to the success seen in India, Apple’s performance in China has been declining, as local competitors, particularly Huawei, have gained traction, even in the premium smartphone segment where Apple once led. The company’s market share in China dropped from 24% in Q4FY23 to just 14% by Q3FY24, as Chinese firms regained market share, significantly affecting Apple’s growth prospects in the region. Despite these challenges in China, India’s market is expected to continue its upward trajectory. Experts predict that iPhone shipments to India could reach 14-15 million units by 2025, further solidifying India’s position as a key growth market for Apple.

While Apple may experience a slight reduction in revenue growth due to factors such as local production and tariff cuts, its focus on expanding in India remains central to its strategy. However, the company may face challenges such as a potential drop in average selling prices (ASP), particularly if Apple introduces more affordable models, like an updated iPhone SE. In Q3 2024, Apple’s ASP in India fell from $1,084 to $958, and this trend could continue in 2025, especially with the introduction of more budget-friendly options.

Apple’s dominance in India’s premium smartphone market is significant, particularly in the $600+ price segment, where the company commanded 64% of the market in Q3 2024, up from 56% the previous year. In comparison, Apple’s share in China’s premium segment has been slipping, with local brands like Huawei, Honor, Xiaomi, and Vivo gaining ground. To further boost its growth in India, Apple is focusing on expanding its presence in smaller cities, where demand for premium devices is rising. While Mumbai, Delhi, and Bengaluru remain key markets, Apple plans to open four additional flagship stores in 2025, as part of its strategy to increase its footprint in Tier-II and Tier-III cities, where the demand for premium products continues to grow. This expansion is expected to contribute to Apple’s continued success in India in the years to come.

Disclaimer: This Image is taken from Reuters.