While sales of Apple products likely eased during the second portion of the Q1 of 2020, sales in Indian during January and February surged more than 55%. Across the globe, Apple sales were likely mixed, but with most developed countries headed toward a lockdown in March it is hard to see how the company would experience robust sales in the latter part of the Q1. COVID has put many consumers in a position where they cannot focus on electronics as food and healthcare items have moved to the forefront. Going forward, a new lower-cost phone and additional revenues chains rising, Apple should continue to see upbeat demand as the importance of a smartphone could rise in the aftermath of the COVID-19 quarantine.
Indian Sales Rise in January and February
Apple shipments surged higher in January and February according to Head-Industry Intelligence Group. Apple iPhone shipments in India grew over 55% during the first two months of Q1 2020. Most of the increase in iPhone sales was due to the increased demand for the Apple iPhone 11 and Apple XR. One of the impetuses for increased sales was due to the supply chain change in mid-2019 increasing manufacturing within India. Apple also benefited from a change in the pricing of the Apple iPhone 11. While the Apple iPhone 11+ reached a price tag above $1,000, the iPhone 11, was priced at a more reasonable $700. Apple’s shipments grew 17% year over year based on robust sales of the Apple iPhone 11, and Apple iPhone XR.
Further success in the sale of iPhones could accelerate as the company focuses not only on the consumer demand in the Indian market but also its supply chain. According to reports, the increased use of India as an export hub that ships phones from India to Europe and other Asian countries have helped the country get a strong foothold in India. In February Apple posted a report that claimed that it was official that the company has planned to open its first retail store in Apple. The addition of the store would help continue the log running focus of the company on Indian customers.
How is Apple Performing Around the Globe?
With most of the world in a recession, it’s hard to imagine that electronic sales would remain as stable in the Q1 as they did in the Q4 of 2019. Some Apple contractors are saying that the company has reduced orders for the March quarter by 18% compared to the prior-year period, according to a report in Reuters. The focus on 5g, which has yet to make it to any Apple iPhone, has been delayed.
The outlook for Apple is shaky. With more than 26-million people losing their jobs in the US in the past 5-weeks its hard to imagine that there was a focus on purchasing consumer electrons. Most job loss individuals are focused on receiving jobless benefits in the United States, with some focusing on receiving food from foodbanks. A supplier told Reuters that it is prepared to lower its shipment forecast for 2020 to 58 million units from the prior expectation of 70 million.
What might be surprising is a survey taken by Civis Analytics which showed that in the US during a period of COVID-19 quarantine that half of the respondents claim they will be spending the same amount of money on consumer electronics as they planned before the outbreak.
During the Q1 Apple stock trading has experienced a wild ride. Initially, the shares tumbled 35% from its all-time high made in mid-February. The share price has rebounded about half of the amount it lost and is now trading in a tight range ahead of its earnings report. The question will be how long it takes for the world to come out of its quarantine. The market appears to be pricing in a return to some normal in the Q3 of 2020. If it takes longer or there are second waves, the shares will quickly reflect the downward sentiment.