Apple slashes 2017 India revenue target by $1B - Mobile World Live

Apple slashes 2017 India revenue target by $1B

13 FEB 2017

India’s so-called demonetisation strategy, which is removing high-value currency notes from circulation to fight tax evasion, squeezed Apple’s sales in the country and cut shipments of iPhones in Q4 by as much as 50 per cent to less than one million units.

After Apple posted a strong start to its fiscal year in October and November, the government’s move to eliminate INR500 ($7.46) and INR1,000 notes created a cash shortage resulting in a sharp slowdown in sales in December. The US-headquartered vendor slashed its fiscal 2017 (the year to end-September 2017) revenue target in India to $2 billion from $3 billion, The Economic Times (ET) reported.

Indian mobile phone makers cut working hours and output amid a slowdown in device sales caused by the government’s move, with smartphone sales down as much as 35 per cent over the last few months, ET said. The vast majority of smartphone sales in India are made with cash.

In Q3 smartphone shipments in India increased 23 per cent, making it one of the fastest growing markets in the world, as demand for mobile broadband connectivity soared and operators rapidly expanded their 4G network coverage.

Putting a positive spin on India’s performance in its fiscal Q1 earnings call, Apple CEO Tim Cook said despite the demonetisation move: “we had all-time record revenue results, and so we were very happy about that. The demonetisation impact has not worked its way through yet. It’s still definitely having some overhang. But I think in the longer term, it’s a great move, and I feel really good about how we’re doing there”.

In early February, Apple moved a step closer to manufacturing iPhones in India, the world’s second largest smartphone market, and production could reportedly begin by the end of April in Bengaluru (Bangalore), capital city of the Indian state of Karnataka.

Cook said it is also in discussions with the government about opening retail stores and fully intends to invest significantly in the country.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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