From the demand perspective, India is one of the important parts of Apple’s growth story for the balance of the decade. On the June earnings call, Cook commented that India hit a June quarter revenue record and grew “strong double digits” and the company opened two new stores that [Apple CEO Tim] Cook commented are “beating expectations.” Apple is early in the process of building out channels and putting investment in direct-to-consumer. It’s the largest market in the world, and Cook says they have a “very very modest market share and it’s a huge opportunity.”
This begs the question, how much can India move the needle for Apple? The company does not break out sales for the country, and we estimate that India is about 3% of revenue today or ~$12B in sales growing at 20-25% y/y. Long-term we believe India should surpass Greater China, which will account for about 20% of sales this year or just under $80B…
[T]oday we estimate that 2% of Apple’s overall revenue is made in India, compared to our estimate that 40-45% of revenue is made in China. As a reminder, about 20% of Apple’s revenue is Services which doesn’t fall under any country.
We believe by the year 2027, 25-30% of Apple’s overall revenue will be made in China, down from 40-45% today. Of that 15% decline, we estimate half will move into India. In other words, India is central to Apple navigating China’s geopolitical production risk.