There are plenty of naysayers in the market who believe that Apple, while a juggernaut in the electronics industry, could possibly not be earning a lot of money. The cost of their products is so prohibitive that most consumers are likely to switch loyalties to the competitors.
But anybody who’s ever doubted Apple’s earning potential might want to give things a second thought. Putting their revenue and profit concerns to rest, Apple India delivered strong financial results that exceeded the estimations of Wall Street. It’s clear: Apple’s products are selling and they’re making a hell of a lot of money.
This is what Tim Cook had to say during a call with analysts:
“Revenue from emerging markets outside greater China was up 40 percent, with great momentum in India, where revenue doubled, year-over-year,”
Analysts credited ecommerce platforms like Flipkart, Amazon and Paytm for the rise of Apple’s empire in India.
Apart from a headline revenue, Cook has finally managed to solve two long-standing underlying problems. One, lack of options for budget-minded buyers to encourage them to join the Apple’s ecosystem (as if they need convincing!); two, relying on the latest flagships to generate revenue.
How did he manage to do that? Let’s take a look at the Cook Doctrine. Unlike Jobs, Cook chose not to pull the plug on the old devices when new products were launched. This is a glimmer of hope for people like me who can buy an iPhone SE for $349, now that iPhone 8 and X have been launched.
In fact, the humble iPhone SE has been one of the reasons why Apple’s revenue doubled in India. While Steve Jobs would’ve bid adieu to the iPhone SE, Tim Cook’s approach of dropping the prices of older models (instead of dropping the products altogether) seems to be doing wonders for Apple.
If you think that dropping the prices means that Apple is leaving profit on the table, think again. Selling handsets at whatever price will help boost the revenue generation from services like Apple Music and Apple store. Reports state that services alone generated $8.5 billion in revenue in the September quarter.
According to Cook, by lowering the price of the entry device, customers can get a taste of Apple’s native operating system. This, in turn, is likely to get them hooked to the ecosystem and invest in other products, even if they don’t spring for the most expensive devices.
So far, that bet seems to be paying off quite nicely. And to all those who were predicting doom for Apple, they’re laughing all the way to the bank!