India is Apple’s next China, right? As Apple released its second-quarter earnings yesterday (Apr. 26), Tim Cook hinted at India’s potential to become the country’s new growth engine, drawing a parallel to China, where growth is flagging. ”I sort of view India [as] where China was maybe seven to 10 years ago,” he said on the earnings call. ”And I think there’s a really great opportunity there.”
India is clearly on Cook’s mind these days. He said iPhone sales in India were up 56% compared to a year earlier, and that the company had spent the last 18 months working “with great energy” on projects there.
But Apple investors will have to take Cook’s word for it, for now. The company doesn’t report its sales figures for India separately. Instead, they’re bundled into the Europe reporting segment, which includes Africa and the Middle East, as well as European countries.
If China is really the model for Apple’s engagement with India, the big indication will come in its accounting—and whether it starts breaking out India as its own sales region, as it has with greater China.
Currently, Apple reports its numbers for five geographic regions: Americas, Europe, greater China, Japan, and the rest of Asia.
No other tech giants lump India in with Europe, and there’s little consistency between the way they group nations. Facebook and Microsoft only singles out numbers from the US; everything else is referred to as ”the rest of the world.” Alphabet includes the United Kingdom as a standalone segment. IBM breaks out its numbers by continents, with India belonging to “Asia-Pacific,” and “Europe” forming part of the widely used “EMEA” cluster, together with Africa and the Middle East.
Two years ago, Apple elevated India’s prominence by adding it to the Europe segment in its 2013 annual report. (India wasn’t named as a component of any other segment before then, so it was likely part of the “rest of Asia” grouping. We’ve contacted Apple for clarity on this, but have not received a response yet.)
Apple’s Europe segment has been a solid performer. It’s been the company’s second largest revenue source, behind the Americas, before it was beaten by the hyper-growth of “greater China” in 2015.
China used to be mentioned in boilerplate text in Apple’s quarterly filings, but that changed in its filing for the fourth quarter of 2010. Under its “Asia-Pacific” segment, Apple reported: “The Company experienced particularly strong year-over-year net sales growth in China, Hong Kong and Korea.”
Two years later, revenues from China and Hong Kong had grown so important that Apple reorganized its reporting segments. Greater China, comprising mainland China, Hong Kong, and Taiwan, was established as a separate segment at the end of 2012.
Cook says that upgrading India’s mobile networks to enable high-speed data would ”unleash the power” of the iPhone there. He alluded to India’s fragmented retail landscape, and hinted that Apple had started work “a few weeks ago” on a solution. But the clearest sign that India’s has become a crucial part of Apple’s plans will be if it gets its own line on the firm’s earnings reports.