Apple may have pinpointed its next big target: India.
The country is on pace to pass the US on the list of the world's largest economies by 2075, according to a recent Goldman Sachs report. While there are plenty of looming obstacles along that road, it's becoming clear that Apple is a believer in India's transformation.
"I see a lot of similarities to where China was several years ago. And so I'm very, very bullish and very, very optimistic about India," Apple CEO Tim Cook told investors in 2017.
Six years later, Apple is just starting to see the fruits of that vision — it opened its first two stores in India earlier this year — and there are plenty of reasons to be as optimistic as ever.
Consider the following:
1. Only 5% of smartphones sold in India are iPhones
According to CNBC, iPhones accounted for 5.1% of all smartphone sales this year in India. As our Beatrice Nolan noted, that still pales compared to cheaper Android devices.
However, that gap is already starting to narrow. According to data collected by CNBC, the share is way up from 3.4% just a year ago, and iPhone sales jumped 50% in that timeframe. India also now accounts for 4% of all iPhone sales, making it the fifth-largest consumer of Apple phones.
2. Apple doesn't need to dominate the market to see huge revenue growth
Apple's share of China's smartphone market is still only 17%. However, Apple's slice of the pie in China nearly doubled from 9% just three years ago, and Greater China represented 19% of Apple's revenue in 2022. Apple doesn't need to be the country's leading phone maker for India to boost its business; it just needs to be in the mix.
And with India surpassing China as the world's largest country by population this year, the room for growth is huge.
3. India is young, with a growing middle class and an increased desire for fancy things
In contrast to China and its aging population, India has a youthful population with a big appetite for consumer goods. 50% of Indians are under 25 and 65% are not yet 35. While China still has a much larger middle class, Cook noted, "There are a lot of people coming into the middle class, and I really feel that India is at a tipping point."
With that growing middle class comes a higher demand for more expensive tech. The average selling price for a smartphone in India is up 18% this year, and "premium" smartphones now represent 11% of all sales, topping double digits for the first time.
4. Making more iPhones in India would be another big win
Apple is also ramping up its manufacturing in India as it looks to be less reliant on China. While it makes sense to avoid getting caught in the US-China trade war and the recent struggles of the Chinese economy, there is an even bigger reason: it is just cheaper now to make things in India.
"Labor in China is now expensive," Nitin Soni, senior director of Fitch Ratings told Forbes. "If you want to lower your cost of production, you have to move to other countries like India."
Apple already dominates the US and much of the rest of the world, but it is still a minor player in India. However, if India's economy can stay the course, Apple is in a prime position to plant a flag in the world's biggest country.
