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Apple Is Aggressively Pursuing This Massive Market With the iPhone 13

Apple (NASDAQ: AAPL) took the wraps off the hotly anticipated iPhone 13 models on Sept. 14, bringing a host of new features and improvements to its bread-and-butter product. Preorders for the iPhone 13 models started on Sept. 17 in Australia, Canada, China, Germany, India, Japan, the U.K., the U.S., and another 30 countries. Preorders in other markets will start from Oct. 1 onward.

Last year, when the iPhone 12 was announced, India wasn't among the countries getting the first batch. Apple had launched the iPhone 12 for preorders in Australia, China, Germany, Japan, the U.K., the U.S., and a few other markets on Oct. 16, 2020, while India was in the second tier of countries getting the device on Oct. 30.

Image source: Getty Images.

India's elevation to the first batch of countries getting the iPhone 13 signifies the importance of that market in Apple's eyes. Let's see why that may be the case.

Apple wants to sustain its terrific momentum

Apple's sales in India have been growing at a nice pace over the past couple of years, a trend that's expected to continue in 2021. According to analysts, iPhone sales in India could jump an impressive 50% in Apple's fiscal 2021 that ends later this month, with the device expected to generate around $3 billion in revenue from that market.

That would be a big step up from Apple's growth in India last fiscal year. The company doesn't want to lose this momentum, which explains why it has decided to launch the iPhone 13 in India, along with other major markets, at the earliest possible opportunity and capitalize on the hype around its latest smartphone.

Apple has come out with trade-in offers that make the iPhone 13 models more accessible for Indian customers and could help the device get off to a good start in that market. For instance, trading in the four-year-old iPhone 8 could help customers get a discount of up to 10,000 Indian rupees ($136). The discounts go up with the later iPhone generations, while the much older first-generation iPhone SE and the iPhone 6 carrying much lower discounts on trade-ins.

Customers can exchange phones from other original equipment manufacturers (OEMs) as well as through the trade-in program.

Considering that older generation iPhones have witnessed robust demand in India over the years because of lower prices, trade-ins on the iPhone 13 mean that the company's existing installed base in the country now has an incentive to upgrade to the latest device. The iPhone 13 mini starts at 69,900 Indian rupees ($950), while the model with the 6.1-inch display starts at 79,900 Indian rupees ($1,087).

Knocking the sticker prices down through the trade-in program could encourage more users to buy the company's latest models, especially considering the growing adoption of 5G smartphones in the country. Third-party estimates say that the early launch of the iPhone 13 could push Apple's shipments to India to 5 million units this year, a 56% increase over last year's 3.2 million units.

The iPhone is set for more success in India

India is the world's fourth-largest market for 5G smartphones even though 5G networks haven't been launched in the country yet. IDC estimates that 40 million 5G smartphones could be shipped to India this year, a massive increase over last year's 3.5 million units. It is also worth noting that 5G smartphones are expected to account for 24% of India's overall smartphone market by the end of the year, which means that they will continue to remain in hot demand once the high-speed networks are rolled out next year.

The iPhone 13 strengthens Apple's position in this space, especially considering it now has two generations of 5G-enabled devices to offer. Last year's iPhone 12 has become more affordable in India, with the mini model now starting at 59,900 Indian rupees ($815) and the 6.1-inch version starting at 65,900 Indian rupees ($896). Apple's trade-in offers make those devices more accessible. The 5G-enabled iPhone 12 mini, for instance, can be bought for 45,900 Indian rupees ($625) after trade-in, depending on the value of the device being exchanged.

Additionally, Apple reportedly controlled almost half of India's premium smartphone market (devices priced at $400 or above) in the first quarter of 2021 as per Counterpoint Research. This puts the company in a great position to tap the country's booming 5G smartphone space as the average price of such devices in the country stands at $410.

So, a broader 5G smartphone portfolio opens the doors for new iPhone users to join the company's ecosystem as Apple now covers more price points following the launch of the iPhone 13. Apple is reportedly working on a 5G version of its entry-level iPhone SE smartphone which could further lower the entry barrier for Indian customers.

All of this indicates that Apple's explosive growth in India is here to stay. As such, it won't be surprising to see the $3 billion in revenue that it is expected to generate over there increase at a fast pace in the coming years as 5G adoption in the country gains momentum. That should be good news for Apple shareholders as well.

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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.


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