Even though Apple is expressing optimism about India being the key to its upcoming growth, a shadow looms over the nation's smartphone industry.
The most recent data reveals a significant decline in mobile phone sales in India, hitting their lowest point since 2019.
Simultaneously, Apple's CEO is noting the "turning point" India is approaching, aided by its burgeoning middle class.
Despite being a newcomer to the Indian retail market with two stores opened last month, Apple has successfully expanded its market share, while low-cost competitors are grappling with sales.
The International Data Corporation (IDC), a market research company, has reported that 31 million smartphones were transported in India within the first quarter of the current year.
This figure represents a 16% decrease from the same timeframe in 2022 and the most dismal first-quarter deliveries in the past four years.
IDC underscores the sluggish demand, attributing it to the precarious economic climate and a surplus of mobile handsets.
Furthermore, IDC forecasts a stagnant growth for India's overall smartphone market this year, following three consecutive quarters of declining sales.
Simultaneously, experts have recognized a surging trend of "premiumisation", where affluent customers shift towards pricier products.
Counterpoint, a tech market research firm, reports that "the premium sector's proportion nearly doubled" during the initial three months of the current year, relative to the same period last year, says Prachir Singh.
However, the hard-hitting economic situation has impacted sales of affordable phones made by companies like Xiaomi and Realme from China, despite firms like Apple and Samsung reaping benefits from this trend.
As consumers take more time to upgrade their handsets, the lower-priced segment is facing difficulties.
The contrast between Apple's success and the declining market for budget-friendly devices also mirrors an uneven recovery from the pandemic in Asia's third-largest economy.
India Ratings and Research noted that the "K-shaped recovery" hasn't facilitated comprehensive consumer demand or wage growth, particularly for the lower income strata. "As a result, there's noticeable demand for luxury items like high-end cars and mobile phones, while demand for everyday consumption goods remains tepid," they reported.
For instance, the sales of basic scooters decreased by nearly 20% this April compared to April 2019, pre-pandemic.
This points out that less affluent consumers "are still hesitant to upgrade," according to Manish Raj Singhania, president of the Federation of Automobile Dealers Associations.
This hesitation also illustrates the persistent challenges in India's agrarian economy, which have been exacerbated by severe weather conditions.
The dwindling demand in rural areas also contributes to the drop in consumer goods like snacks and carbonated drinks, where growth has slipped to single digits following a year and a half of two-digit growth.
Annual household expenditure on goods and services, which had increased 20% in March 2022, has drastically decelerated this year.
This slowdown is due to Indian consumers facing the pressure of escalating interest rates and persistently high inflation.
On a broader scale, India's economic growth tapered off to 4.1% in the first quarter of 2023, marking the lowest annual growth, according to official statistics.