Middle class driving iPhone sales in emerging market: Apple CEO Tim Cook
Middle class and first time smartphone buyers in emerging markets such as India and China were among the major drivers of iPhone sales in January-March period with the momentum expected to continue, Apple CEO Tim Cook has said.
Cook, under whom the California-based tech giant sold 61.2 million iPhones in January-March 2015, said emerging markets accounted for almost 40 percent of Apple’s revenue for the second quarter. Apple follows October-September period as fiscal year.
Yesterday, Apple had said that its net profit stood at $13.6 billion in the January-March quarter, while revenue was at $58 billion. About 69 percent of the revenue came from international sales. Speaking at an investor call, Cook said: “We also continue to see a reasonable percentage of first time buyers, particularly in some of the emerging markets. ”And if you look at emerging markets in general, revenue from emerging markets, just for the March quarter, was up 58 percent year on year. And a big piece of what is driving that is iPhone. ”Obviously, those results would have been higher without some of the FX (currency) headwinds…”
Apple chief further said: “And as I mentioned before, in emerging markets, we did extremely well. And so, I feel really good about where we are, and you can hopefully tell with the strong guidance that we provided, that we’re very bullish on the current quarter as well.” Apple said ‘swappers’ — who changed their last smartphone with an iPhone — also contributed to the growth in iPhone sales. To a separate query on iPhone purchases by the middle class in emerging markets, he said: “…And so as I look at that, without having market research data on the demographics that you are asking, it is clear to me that it has to come from the middle class. ”Because the upper income earners, there’s only so many of those. And you cannot grow those kind of numbers without getting significantly into the middle class. ”I hope we’re also beyond the middle class, but I don’t have the data to suggest that that’s the case or not the case.”
Cook said iPhone shipments have picked up significantly in the BRIC countries (Brazil, Russia, India and China). ”If you look in the emerging markets, our revenues were up 58 percent year on year. And this accounted for just slightly less than 40 percent of the company’s revenue. If you look at BRIC within the emerging markets, BRIC countries were up 64 percent year over year,” he added. In the first six months of 2015 fiscal, Apple sold over 135 million iPhones, 34 million iPads and 10 million Macs. Its revenue grew 28 percent to more than $132 billion and net income rose by 36 percent to over $31 billion as compared to the six months ended March 29, 2014.