Narendra Modi’s decision to demonetise two high-value currency notes may have crippled small businesses in the country, yet American smartphone maker Apple Inc displayed a stellar performance.
During October-December 2016, the iPhone maker clocked an “all-time record revenue” from India, Apple CEO Tim Cook told analysts during a post-earnings call on Jan. 31. The company, though, does not break down its revenue figures for India separately.
“Despite the demonetisation move in India that created lots of economic pressure there last quarter, despite that, we had all-time record revenue results, and so we were very happy about that,” Cook said. “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.”
On Nov. 08, the Indian government decided to discontinue the Rs1,000 and Rs500 notes, which at the time made for 86% of the total currency in circulation by value. The sudden decision led to massive chaos across the world’s fastest-growing major economy as desperate citizens formed long queues outside banks to exchange their currency notes and thronged ATMs to withdraw the new notes. Around 100 deaths were reported in the aftermath of demonetisation.
Apple had emerged as an unlikely beneficiary of the note ban as many consumers looking to do away with their stash reportedly bought expensive iPhones. In the three days following demonetisation, around 100,000 iPhones were sold in India, which is about three-fourth of the average monthly sales of the device in the country, The Economic Times reported.
In 2016, iPhone sales in India crossed 2.5 million units, “with a third of its total shipment coming alone from the record fourth quarter (October-December),” Counterpoint Research said in a note in January. The spike during October-December 2016 coincided with the high-demand festive season and the launch of the iPhone 7, Counterpoint added.
Despite this spike, though, Apple still holds a minuscule share in the world’s second-largest smartphone market. In October-December 2016, it stood 10th in overall smartphone sales in India, way behind South Korean rival Samsung, which dominated the market, as per Counterpoint.
Over the recent years, Apple has stepped up its game in India as it loses ground in China, which was its growth engine until recently. Among other things, Cook made his maiden visit to India in 2016 and the company received the much-awaited permission to set up direct stores in the country.
However, Apple has been elusive about when its first retail outlet will open its doors. Neither has the company publicly made any investment commitments for the country.
Cook reiterated his interest in India during the investor call but stayed away from any specifics.
“We are in discussions on a number of things, including retail stores, and fully intend to invest significantly in the country and believe it’s a great place to be,” he said.