PALO ALTO, U.S. — Apple CEO Tim Cook says India will be a “major focus” for the company, which is looking to tap the country both as an alternative production base to China and as a source of growth.
Apple set a quarterly revenue record in India for October to December, with double-digit year-over-year growth. This bright spot came amid otherwise gloomy results announced on Thursday: Production headwinds in China and weakening global consumer demand dealt the company its first revenue drop in more than three years.
“India is a hugely exciting market for us and is a major focus,” Cook said at the company’s earnings call on Thursday. “We’re putting a lot of emphasis on the market.”
“I’m very bullish on India,” he added.
Apple said it also logged an all-time record for iPhone sales in India in the quarter, but did not give specific numbers for either revenue or units sold.
“We … grew very strong double digits year over year, and so we feel very good about how we performed, and … that’s despite the headwinds that we’ve talked about,” Cook said.
Apple has not yet opened retail stores in India, the world’s second-largest smartphone market, but appears to be gearing up to do so. It started hiring retail store workers in the country in January and has posted plans to fill many other roles as it prepares to open its first flagship locations as soon as this quarter.
Like China, India is important to Apple not only as a sizable market but also as a growing manufacturing hub.
The Indian trade minister said late last month that Apple wants India to account for up to 25% of its production, from about 5% to 7% now.
Much of the iPhone giant’s manufacturing is based in China, which led to significant supply chain disruptions last year due to the country’s strict zero-COVID policy.
Apple warned investors on Nov. 6 that China’s COVID restrictions had impacted its primary assembly hub for the iPhone 14 Pro and 14 Pro Max in Zhengzhou. As a result, shipment volumes of the two new models would be lower than expected and customers would experience longer wait times to receive new products, the company said.
“We’re now at a point where production is what we need it to be, and so the problem is behind us,” Cook said on Thursday.
Apple has accelerated its effort to diversify its production base amid souring Sino-U.S. relations and the pandemic-related supply chain disruptions, particularly in China last year.
India and Vietnam have gained bigger shares of Apple production as the U.S. tech giant looks elsewhere.
Apple plans to move some MacBook production to Vietnam for the first time in 2023, Nikkei Asia previously reported. The company started mass-manufacturing AirPods there in 2020 and also shifted some production of iPads to the Southeast Asian country in 2022. The company announced in October that it had started producing the iPhone 14 in India, only a few weeks after the release of the latest flagship phone.
“We build our products everywhere. There are component parts coming from many different countries in the world, and final assembly coming from three countries in the world on just iPhone. So we will continue to optimize it over time and change it to continue to improve,” Cook said.__Nikkei Asia