Apple India profit shrinking by over 70% in FY19

While the offline smartphone sales declined four per cent in India, the online off-take grew 26 per cent year-on-year during the second quarter of 2019. Apple is struggling in the sales of iPhone in India, the third biggest smartphone market in the world.

The India smartphone market grew 9.9% year-on-year (YoY) and 14.8% quarter-on-quarter (QoQ) and in the second quarter of 2019, smartphone shipments rose to 36.9 million, up from 32.1 million in the previous quarter as per IDC.

Chinese vendors, though, still have the lion’s share of the market with Xioami, Vivo, Oppo and Realme cumulatively accounting for over 60% of the Indian smartphone market. Xiaomi has spotted with a 28.3% market share comprising 10.4 million shipment units. However, their market share has fallen from 30.6% in Q1 2019. Whereas, Samsung shipped 9.3 million units and increased its market size to 25.3%-up from 7.2 million units and 22.3% market share in Q1 2019. While Xiaomi’s YoY shipment volume grew by 4.8% YoY, Samsung registered a strong YoY growth of 16%.

The premium smartphone market in India has been changing over the past two years with the market positioning of OnePlus. The Chinese smartphone maker has given a tough competition to Apple (I Phone).

A report shows with over 19% decline in revenue, Apple India posted a total revenue of Rs 10,538.2 crore in FY19 from Rs 13,048.7 crore in the previous fiscal. Sales of Apple devices and software services accounted for 93% of overall revenue while the rest 7% came from the tech support services provided in India and overseas.

A report shows, Apple India’s total expenditure dropped 13.5% to Rs 10,152.5 crore in FY 19 from Rs 11,740.7 crore, its profit also took a hit of about 70.7%. Apple India’s profit stood at Rs 262.27 crore in FY19 as compared to Rs 896.3 crores in FY18.

The biggest cost component was the cost of traded goods sold, which at Rs 8006.5 crore make up about 79% of the company’s total expenditure.

The slump in sales can also be measured by the 20.8% drop in the purchase of stock-in-trade during the year, which reduced to Rs 8,334.8 in FY19 from Rs 10,530 crores in the preceding fiscal.

Likewise, Employee benefits expenses also rose about 48% to Rs 518.8 crore in the last fiscal from Rs 350.33 crore in FY18. The income statement also included an unexplained expenditure worth Rs 218.16 crore.

An expert says, the time has gone, people will buy for such an expensive phones, where Apple keep changing its models frequently, earlier a person was buying the iPhone because of the security and ease of use. Apple iPhones have apparently suffered a massive security breach, with hackers placing so-called “monitoring implants” in an untold number of devices.

The malware from the hacks could allow others to read all the database files on a victim’s phone, including messages between users on such encrypted platforms as WhatsApp, iMessage, Telegram and others. Gmail and Google Hangout information could also be read, and contacts and photos accessed. Passwords to other devices could also be compromised if stored on the iPhone. In the ear of cryptocurrency and banking systems are going online, the potential for damage to any particular user it extreme.

Google asserted in August that iPhones suffered a massive security breach, with hackers placing so-called “monitoring implants” in an untold number of devices. After the announcement of the security breach in iphone, a prospective iPhone buyer is now going for a second thought.