China’s covid curbs may not dent Apple's good run in India

The fresh round of covid-19 restrictions in China that is likely to impact iPhone 14 Pro and iPhone 14 Pro Max shipments globally may not dent Apple’s good run in India, said analysts. They added that the company’s growth in India has been driven by older Apple devices, while it also experiences low low demand in the December quarter usually.

On Monday, Apple said that fresh Covid-19 restrictions in Zhengzhou, which houses manufacturer Foxconn’s iPhone facility, will temporarily disrupt supply of the premium iPhone models, resulting in lower than anticipated shipments. Analysts said that this is likely to affect Apple’s bottom line in markets like North America and Europe, which are heading for a major shopping season in December. In India, however, the major shopping season ended in September and October.  

Faisal Kawoosa, founder and chief analyst at techARC, noted that the latest model is never the top selling model for iPhones in India.

“Whatever Apple is making in India should fulfill the local demand in the December quarter. 

The main consumption period for iPhones in India is over. The concern for Apple right now is Europe and the US markets due to the Christmas shopping season,” he said.

Zhengzhou isn’t the only manufacturing hub in China that is facing fresh covid-19 curbs either. The resurgence of covid cases and China’s zero-tolerance policy has led to similar curbs in Guangzhou and Shenzen since October as well.

Tarun Pathak, research director at Counterpoint Research, said that if these restrictions extend beyond a four-week period, supply of components for iPhones being assembled in India may also be impacted. 

“Sensors, Integrated circuits (IC), and other components are likely to be impacted,” said Pathak, adding that a low single digit decline in iPhone shipments of less than 5% is expected in the December quarter due to the curbs.

Further, supply shortage may not amount to a loss for Apple as the demand in India is likely to be pushed to the next quarter, Pathak said.

Apple started early production of iPhone 14 models in India at Foxconn's Sriperumbudur factory in Tamil Nadu and Pegatron’s Chennai factory. “Only iPhone 14, iPhone 13 and iPhone 14 Plus are being assembled in India. Except iPhone 13, demand is less as the season for high demand is almost over in India,” said Navkendar Singh, Associate Vice President, Devices Research, IDC India, South Asia and ANZ. 

Mint reported in April that Apple is likely to surpass last year’s iPhone shipments in India in 2022. According to IDC, in 2021, Apple shipped 4.8 million iPhones in the country, which is likely to grow to 5.5 to 6 million in 2022.

Apple posted its best quarterly revenue in India in the September quarter, chief executive Tim Cook said at the company’s quarterly earnings call with investors in October. India registered “very strong double-digit growth” in overall revenues, according to Cook.