Indians bought a record 2.5 million iPhone smartphone between October 2015 and September 2016, marking a growth of over 50 percent year-on-year, boosting Apple's confidence even as an analyst said that the country offers about $10 billion in revenue opportunity over the next five years.
"Our iPhone sales in India were up over 50 percent in fiscal 2016 compared to the prior year, and we believe we're just beginning to scratch the surface of this large and growing market opportunity," Apple chief executive Tim Cook said during the investors' call after the FY2016 earnings were released.
The rise in iPhone shipments to India during fiscal 2016 (October 2015 to September 2016) enabled Apple to increase its market share to 2.2 percent from 1.6 percent in the company's previous fiscal, according to research firm Counterpoint Research.
However, an analyst said that the incremental sales opportunity in India won't impact Apple's overall revenues much.
"We think lack of affordability will likely limit the potential upside from the region. India might offer about $10 billion of incremental revenue opportunity in five years, which might not move the needle for Apple," CNBC quoted from a note issued by Mizuho.
Samsung is a dominant player in India's smartphone market, followed by Chinese and domestic handsets.
"For Apple, the total available market is just 8-10 million units per year. Apple has to align the portfolio first, maybe a cheaper mid-range iPhone. If they can have something that starts at $399 in India, that will make much more sense," the CNBC quoted Neil Shah, research director of devices and ecosystems at Counterpoint Research, as saying.
Apple's annual sales fell 7.7 percent to $215.6 billion in FY2016 in comparison to $233.7 billion in the preceding fiscal, while volume sales declined 5 percent to 45.5 million units. Net profit came in at $45.7 billion from $53.3 billion, year-on-year.
For fiscal 2017, the company gave a revenue guidance of $76-78 billion and gross margin in the range of 38 and 38.5 percent.