India set to become Apple's third-largest market by 2026: Report

India is on track to become Apple’s third-largest market by 2026, surpassing both Japan and the U.K., according to a report by The Economic Times.

Currently ranking fifth for Apple, India is expected to see local sales grow by as much as 20% next year, driven by a surge in demand for premium smartphones and other electronic items.

Apple gains momentum in India

Industry experts say India’s rapid economic growth and rising disposable incomes are pushing consumers toward high-end devices. Apple, known for its premium iPhones and strong brand appeal, is well-positioned to benefit from this trend.

By the end of 2024, Apple is projected to ship more than 12 million iPhones to India, up from 8.5 million in 2023, the report mentioned. 

Financing options, festive discounts, and consumer shifts are some of the top reasons for Apple's growth in the country. 

Challenges and opportunities for Apple

Despite strong growth, Apple’s revenue in India may see moderate gains. As the company ramps up local manufacturing and import duties decrease, the average selling price (ASP) of Apple products is expected to go down.

The ASP dropped from $1,084 to $958 in the third quarter of 2024, and it may decline further if Apple introduces a more affordable iPhone SE model.

Still, Apple retains a commanding share of India’s high-end smartphone market. In the $600-plus range, Apple’s market share climbed to 64%  in the third quarter of 2024, up from 56% a year earlier. Looking ahead, analysts predict iPhone shipments could reach 14 million to 15 million units by 2025, underscoring India’s growing importance in Apple’s global strategy.

Declining share in China

While Apple’s fortunes rise in India, the company’s market share in China has dropped steadily—from 24% in the fourth quarter of fiscal 2023 to 14% by the third quarter of fiscal 2024, the report said. Local competitors such as Huawei, Honor, Xiaomi, and Vivo are capturing larger slices of the premium segment, a space where Apple was once dominant.

Expansion beyond major cities

Apple’s growth plan also involves tapping into smaller cities across India. While urban centres like Mumbai, Delhi, and Bengaluru remain core markets, Apple aims to open four more flagship retail stores by 2025. The company is also extending its reach in Tier II and Tier III cities, where there is a growing appetite for premium products.