Apple, the tech giant that revolutionized the personal computing and smartphone markets, is looking towards emerging markets for growth as it faces sluggish sales in its traditional strongholds of the United States and China.
Apple’s iPhone sales have been declining in recent years, as the company struggles to keep up with competitors offering lower-priced alternatives. According to market research firm IDC, Apple’s market share fell from 14.7% to 13.2% in the first quarter of 2023, while Chinese smartphone maker Xiaomi’s market share grew from 11.8% to 13.3% during the same period.
To address this challenge, Apple is focusing on expanding its presence in emerging markets such as India, Indonesia, and Brazil. These countries offer large populations with growing middle classes, presenting opportunities for Apple to increase sales of its products.
India, in particular, is a key focus for Apple. The country is the world’s second-largest smartphone market after China, with an estimated 780 million users. However, Apple currently has only a small share of this market, due in part to the high cost of its devices.
To address this issue, Apple has started manufacturing some of its devices in India, which reduces costs and enables it to compete more effectively with local competitors. In addition, Apple has launched a trade-in program in the country, which allows customers to trade in their old devices for discounts on new ones.
Apple is also making strategic investments in emerging markets. In 2022, the company announced a $1 billion investment in SoftBank’s Vision Fund, which has a strong presence in emerging markets. This investment is expected to help Apple gain access to these markets and expand its product offerings.
Another area of focus for Apple is services, such as the App Store, Apple Music, and iCloud. These services have become increasingly important for the company as hardware sales have slowed. Apple has been expanding its services offerings in emerging markets, such as launching Apple Music in India in 2018.
While Apple is investing in emerging markets, it faces challenges such as currency fluctuations, regulatory hurdles, and local competition. For example, in India, the company is facing stiff competition from local players such as Xiaomi and Samsung, which offer lower-priced devices that are popular with consumers.
In addition, Apple’s focus on premium products and pricing may not appeal to consumers in emerging markets who prioritize affordability. Apple may need to consider adjusting its pricing strategy or developing lower-priced products tailored to these markets.
Despite these challenges, Apple remains optimistic about its prospects in emerging markets. In a recent earnings call, CEO Tim Cook said that Apple sees “enormous potential” in these markets and is committed to expanding its presence there.
Apple’s success in emerging markets will be key to its long-term growth, as it looks to offset slowing sales in its traditional strongholds. While the challenges are significant, Apple’s strong brand and reputation for quality products give it a solid foundation on which to build in these markets.
