Sunday, February 10, 2013

Apple Illustrates the Difference in Effort Needed To Increase Sales in Different Markets

In the United States, Apple's iPads are fitted with Bible applications to allow government employees to take oaths in connection with promotions, and are physically reconfigured for high-security use in federal facilities. Neither of these will have meaningful effect on American iPad sales.

But, look at a less mature market for Apple's products, and things change.

In India, a combination of advertising increases and hardware financing grew Apple's India businesss 400% within three months. When Apple arrives with a lower-priced handset, the addressable market in India and China will increase again, with predictable impact on unit sales and thus profit.

China and India both dwarf the United States in population, and the Chinese middle class is larger than the entire population of the United States. The fact that Apple continues to enjoy >100% growth in China is outstanding. The Jaded Consumer site stakes its prognosticatory reputation on China exceeding the United States as a source for Apple revenue in 2013. Apple and Android shared 98% of China's smartphone market in the last quarter of calendar 2012 – with Android dominating, especially in non-urban areas. With 53 million smartphones sold in China during the period (up 64% y/y), Apple's iPhone 5 alone accounted for roughly 4% of China's cell phone sales in the quarter just on its launch weekend (over 2m units, excluding iPhone 4S and iPhone 4).

Apple's new geographic breakdown aggregates the United States into an "Americas" segment that includes two continents, so direct comparisons are hard to make – but Apple's performance in "Greater China" rose from 9% of Apple's revenues to 13% of Apple's revenues over the year leading up to the last quarterly results.  (The rest of Apple's Asia Pacific region yielded 8% of Apple's revenues, up from 7% the year before.)  As Apple approaches India with greater seriousness, its platform's language support will be a great asset: India has hundreds of living languages.

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