Emerging markets to save Apple's growth

Apple presented its latest quarterly figures last week, acknowledging that revenue was down three percent from the same period last year. However, the published ones are missing press release some more information. Because the iPhone manufacturer definitely has a strategy to be able to record growth again in the medium and long term. As Bloomberg journalist Mark Gurman pointed out in his Power On newsletter yesterday, Apple intends to keep its focus on emerging markets. In addition to India, where the first two Apple Stores were recently opened, there are also Mexico, Indonesia, the Philippines, Saudi Arabia, Turkey and the United Arab Emirates.

Tim Cook touts expanding supply in emerging markets

Apple's CEO Tim Cook's belief in the emerging markets strategy is likely to be revealed during the Earnings calls didn't surprise anyone last Thursday. After all, he only recently traveled through India and, in addition to other business appointments, also visited the newly opened Apple Stores. He describes India as a market for Apple as “the new China”. Overall, India was mentioned as a sales market 20 times within the one-hour call. 

However, Apple's Chief Financial Officer Luca Maestri also commented on the increasing iPhone sales. In the quarter discussed, these turned out much better than in the previous quarters, which can also be attributed to a few individual markets. iPhone sales have picked up speed in South Asia, the Middle East and South America. The overall 3% decline in sales is due to the simultaneous development of the largest established markets – North America, Japan and China.

Analysts are said to see strong growth potential

Among other things, analysts and their forecasts are responsible for Apple's market value, i.e. the stock market price. Most recently, some of these experts said that Apple was doomed to years of sluggish growth. The reasons for this include declining iPhone sales, the prospect of slow sales of mixed reality headsets, high development costs at the same time, etc. But Apple wants to counteract this with its emerging market strategy.

It is possible to counteract the forecasts by serving the relevant countries and regions more intensively and building up a user base there, while not neglecting the established markets. Apple's own ecosystem of easily connectable devices and associated services plays into Apple's hands. So if you buy an iPhone, you might also be interested in an Apple Watch and/or Apple TV+, Apple Arcade, etc.

Apple and emerging markets: who should approach whom?

Last week's earnings call brought with it the realization that Apple intends to concentrate on markets that have not yet been fully developed, but will not make any cuts in price. Tim Cook thought that e.g. For example, in India, the growing middle class is being addressed instead of iPhones and other devices being offered at lower prices. In fact, according to Mark Gurman, some iPhone models cost the equivalent of more in India than in the US.

An aggressive market push with cheaper devices is therefore not on the agenda. However, it could be worthwhile to offer at least older devices much cheaper. So should a new iPhone SE come out, the previous model could go for $199, Gurman suggests. That would be an easy way to flood the market with Apple devices and thus attract customers to more devices and all kinds of services.

Johannes Domke

After graduating from high school, Johannes completed an apprenticeship as a business assistant specializing in foreign languages. But then he decided to research and write, which resulted in his independence. For several years he has been working for Sir Apfelot, among others. His articles include product introductions, news, manuals, video games, consoles, and more. He follows Apple keynotes live via stream.