Apple beats street estimates on strong iPhone sales; CEO Tim Cook sees India at “tipping point”
Apple reported its fiscal second-quarter earnings yesterday that beat market expectations, helped mainly by stronger-than-anticipated iPhone sales, but also an increase in its services business. Sales were down overall, however. Sales in India set a March-quarter record, CEO Tim Cook told analysts in a conference. The country, where Apple recently opened two of its brick-and-mortar stores, was a “major focus” for Apple and he felt it was at “a tipping point,” with large numbers of people entering the middle class. Notes: Apple reported its fiscal second-quarter earnings yesterday that beat market expectations, helped mainly by stronger-than-anticipated iPhone sales, but also an increase in its services business. Sales were down overall, however. The Company posted quarterly revenue of $94.8 billion for the three months through March, down 3 percent year over year, and quarterly earnings per diluted share of $1.52, unchanged from the year-earlier period. "And as I noted earlier, in a milestone for Apple, we just opened our first two Apple stores in India, in Mumbai and Delhi. I was there to see it for myself, and I couldn't have been more delighted by the excitement and enthusiasm of the customers, developers, creators and team members I got to spend time with,” he said. "Looking at the business in India, we did set a quarterly record, grew very strong, double digits year-over-year. So, it was quite a good quarter for us, taking a step back, India is an incredibly exciting market. It's a major focus for us.” Over time, Apple has been expanding its operations in India, including getting its biggest contract manufacturers to expand their operations in the country, as it looks to reduce its dependence on China. On the retail front, Apple opened an online store in India three years ago, and it has incrementally expanded its distribution network of Apple-authorised premium stores. Last month it finally added the first of its physical stores. Apple has also struck a major partnership with India’s Tata Group, which could be a game changer for both businesses. For the current quarter, CFO Maestri said the company expects overall revenue to be similar to the March quarter. Apple’s iPhone sales have increased in the backdrop of a broader smartphone industry contraction of nearly 15 percent during the same time, according to an IDC estimate, CNBC points out. In other words, Apple has taken market share from rivals, especially in the premium phones segment. Overall, Apple’s sales in three of its four biggest markets fell – the Americas, Japan and Greater China, as Apple calls it. Sales rose in Europe and in the rest of the Asia Pacific, which includes India. “The dynamism in the market, the vibrancy is unbelievable,” CEO Cook said. “There are a lot of people coming into the middle class, and I really feel that India is at a tipping point, and it's great to be there,” Cook said.