Also in the letter:
■ Study highlights lack of funding access to women
■ ETtech Deals Digest
■ Offline smartphone sales surge
Apple unveils record $110 billion buyback as results beat low expectations
Tech titan Apple reported a 4% overall sales slump for the first quarter (January-March), with China leading the decline. However, India remained a sweet spot for the company with a record growth in revenue, CEO Tim Cook said.
Driving the news: Cook said the India market grew by double digits. “I see it (India) as an incredibly exciting market and it’s a major focus for us,” he said.
Cook said Apple is producing iPhones in India to stay competitive, and the company’s growth in the country is linked to its operational expansion.
India was among emerging markets such as Latin America, the Middle East, Indonesia and the Philippines, where Apple recorded strong sales momentum.
Key numbers: Apple’s sales decline comes against robust numbers reported by its Big Tech rivals earlier this month on the back of artificial intelligence (AI). The company, however, found a silver lining in the continued growth of its software and services.
- Overall sales fell 4% to $90.8 billion, and were down 8% in China
- Profit fell 2% to $23.64 billion, Apple’s first quarterly decline in a year
- Sales of software and services rose 14% to $23.9 billion last quarter
- iPhone revenues dropped to $45.96 billion, from $51.33 billion a year ago
AI bets: The company guided for single-digit growth in the June quarter, as it prepares to announce generative AI-based features at an event in June for its future products. Cook said the company expects a return to sales growth in the current quarter driven by its upcoming AI features.
Also read | Big Tech reports strong Q1 numbers amid AI push
Buyback: The iPhone maker unveiled a record share buyback programme, the largest in the company’s history. Apple increased its cash dividend by 4% and authorised an additional programme to buy back $110 billion of stock. This sent the stock up over 6% in extended trade.
Also read | Apple aims to tell an AI story without AI bills
Govt seeks inputs from industry to design more here
.jpg "TECH- ELECTRONICS MANUFACTURING_THUMB IMAGE_ETTECH (2)")
The government is now pushing companies to do more than make in India. It has started seeking inputs from companies and industry groups for policies, which will lure electronics makers to start designing more in India.
Driving the news: The Ministry of Electronics and Information Technology (MeitY) has held meetings with industry bodies such as the India Cellular and Electronics Association (ICEA), of which Apple and other electronic majors are members, and educational institutions, regarding this, a senior government official told us.
But why? The official said the aim is to determine what parts of an electronics supply chain are designed and manufactured in India and the road ahead to increase the domestic value-addition in the overall supply chain.
The government also wants to ensure that the intellectual property of these designs, apart from the ones in the semiconductor and chip space, is with India.
A deeper look: For example, Apple manufactures its flagship products like iPhones, iPads and AirPods across the world including in India, China, Taiwan, Thailand and Vietnam. But their designing is carried out at its headquarters in the US.
Housing more smartphone and component designing companies would be a boost to India’s end-to-end supply chain ambitions.
Recap: ET had reported in August last year that the government is discussing ways in which global electronics and IT hardware companies can increase the local value addition in products that are assembled in India to 60-80% in the next 5-10 years.
Only 3% women entrepreneurs in tier 2-3 cities have access to external funding: study
A mere 3% of women entrepreneurs in India’s tier II and III cities, out of the 300 surveyed, had access to external funding like bank loans or equity investments for starting or growing their businesses, a study has revealed.
Women-led MSMEs: Only 20% of India’s 61 million micro, small, and medium enterprises (MSMEs) are led by women, with almost half of them located in rural areas, according to a white paper by the Reserve Bank Innovation Hub (RBIH) in collaboration with financial management app Salt.
Gender gap: The report highlighted the need to make the financial system responsive to care gaps, or pauses in women’s careers, as closing the gender gap in employment could lead to a 35% increase in global GDP, emphasising the significance of enhancing women’s participation in India’s workforce.
“The lack of gender-disaggregated data presents a significant barrier to improving women’s access to financial services,” said Rajesh Bansal, chief executive of RBIH.
Need for action: To break the vicious cycle of women-owned businesses not scaling because of lack of funding, and not getting funded because they lack scale, the report suggests giving more grants and venture capital funds to women entrepreneurs and female-focussed incubators.
ETtech Deals Digest: Startup funding in April falls by 21% to $564 million
Technology startups logged a total funding value of about $563.5 million in April 2024, down by 21% from the same month a year ago.
Startups across stages, majorly late, raised the funding across 78 rounds, as per Tracxn data. In April 2023, startups had raised a total of $464 million across 113 rounds. Notably, the funding winter was in full force in March 2023, having started showing signs from September 2022.
Mumbai-based Venture Catalysts emerged as the topmost investor in terms of deal volume in the latest month. It deployed capital in startups such as Plotch, MatchLog, CloudWorx and BluWheelz. Mumbai-based Venture Catalysts emerged as the topmost investor in terms of deal volume in the latest month. It deployed capital in startups such as Plotch, MatchLog, CloudWorx and BluWheelz.
Offline smartphone sales surge in March quarter as buyers seek premium feel
Retail stores in India are strengthening their position in the smartphone market. Sales in physical stores have surged in the March quarter, driven by growing demand for premium devices.
Numbers: The share of offline retail in smartphone sales was at 61% in the three months ended March 31, up from 56% in the December quarter, according to data from Counterpoint Research.
Etailers Amazon and Flipkart still continue to be the largest sales channel in India, accounting for almost all of the remaining 39% online market share.
Why the spike? Offline sales are rising due to strong demand for premium handsets where customers value the touch-and-feel experience before purchasing, experts said. They are also offering customers several financing options such as no-cost EMIs, paper-based financing, and GST credit.
Today’s ETtech Top 5 newsletter was curated by Vaibhavi Khanwalkar in Bengaluru and Jessica Rajan in New Delhi.
