India’s importance grows as Apple CEO Cook’s pay slumps on falling sales
Apple will have to double down on its India focus as the iPhone-maker witnessed drop in sales for the first time since it launched smartphones in 2007, resulting in 15% ($1.55 million) cut in company CEO, Tim Cook’s salary.business Updated: Jan 07, 2017 17:03 IST
Apple will have to double down on its India focus as the iPhone-maker saw a drop in sales for the first time since it launched smartphones in 2007, resulting in 15% ($1.55 million) cut in company CEO Tim Cook’s salary.
Also, for the first time in 15 years, Apple – founded by Steve Jobs, who revolutionised phone designs – missed its sales targets.
According to Apple’s SEC filings, the company missed its sales target by 3.7%, and reported $215.6 billion in revenue in 2016. Its operating income fell from $71.2 billion to $60 billion.
The company recently faced challenges from its ever-growing Chinese competition, and its attempt to grab buyers in emerging markets with the relatively lower-cost iPhone SE has failed. Throw in the rising competition from Chinese handset makers, Cook is struggling to keep the momentum going.
India, on the other hand, is the only market that is growing, while all other markets such as America and China are facing saturation -- in some markets penetration of phones are as high as 80% to 85%. India is already the world’s third largest smartphone market, where more users are getting on the internet through mobile phones than anywhere else in the world.
Over time, many believe that smartphone innovation has stagnated and as lifetime of the devices have gone up, resulting in a shrinkage of new buyers in developed markets.
In China, it hasn’t been able to grow its marketshare. According to research firm Gartner, Apple witnessed a drop of 2.5% in marketshare.
For Cook, the only big market bet Apple’s growth remains India – where half of the population is under 25 years old, and owning an iPhone is still an aspiration.
In India, too, Cook has faced tough competition from its Chinese rivals. Another research firm Counterpoint Rresearch noted Apple’s share to be 5.6%, while its Chinese rival Oppo had a marketshare of 8%, in 2016’s third quarter.
Through his multiple visits – in one of which he offered prayers at Mumbai’s Siddhivinayak Temple – Cook has tried to convince authorities to dole out special tax benefits for manufacturing in India. However, the authorities aren’t convinced, as they believe that it would “discriminate” one handset maker over other.
Apple’s latest India sales numbers aren’t available, but 2015 figures revealed that the company has crossed $1 billion in sales.