Apple's India sales cross $10 billion as market expansion accelerates

Apple's annual sales in India crossed $10 billion for the first time, cementing the country's position as a critical growth engine for the iPhone maker as it diversifies beyond China.

The milestone follows record iPhone revenues in the first two quarters of fiscal 2026, with particularly strong momentum in India and other emerging markets, according to Zacks Equity Research. Apple expects third-quarter fiscal 2026 net sales to grow between 14 percent and 17 percent year over year, with gross margin projected at 47.5 percent to 48.5 percent.

Apple's India expansion spans retail stores, local manufacturing through partners including Foxconn and Tata Group, and growing adoption of the iPhone 17 family. The company's installed base now exceeds 2.5 billion active devices, providing a foundation for continued hardware sales and services growth. Apple's services segment reached a record $31 billion in the second quarter of fiscal 2026, driven by double-digit growth across most categories and markets.

The $10 billion India milestone strengthens Apple's case for reducing dependence on China, where regulatory and geopolitical risks have mounted. Apple shares have gained 23.9 percent year to date, outperforming the broader tech sector, though the stock trades at 35.73 times forward earnings, a premium to the sector's 20.9 times.

India's Role in Apple's China Diversification

India has emerged as Apple's most important alternative manufacturing and sales hub. The country's large and growing middle class, expanding 5G infrastructure, and government incentives for local electronics production have made it an attractive market. Apple has opened multiple retail stores in India and expanded local assembly through contract manufacturers including Foxconn and Wistron.

The company faces competition from Samsung and Chinese brands such as Xiaomi and Vivo, which have long dominated India's smartphone market. Apple's premium brand focus has helped it capture a growing share of the high-end segment, where consumers increasingly favor iPhones for their integrated hardware and software experience and camera capabilities. The launch of the iPhone 17e further broadened Apple's addressable market in India, making the brand accessible to a wider range of consumers.

Apple's India strategy also extends to services. The company has been expanding Apple Pay, Apple Music and other services in the country, using the growing installed base of iPhones. With the Indian government pushing for local data storage and digital infrastructure, Apple's investments in the country align with regulatory requirements.

What the $10 Billion Milestone Means for Investors

Apple's India growth comes as the company prepares to report third-quarter fiscal 2026 earnings on July 30. The Zacks consensus estimate calls for net sales of $108.75 billion, up 15.64 percent year over year, with earnings per share of $1.88. Apple has beaten the Zacks consensus estimate in all four trailing quarters, with an average earnings surprise of 7.34 percent.

The India milestone could support Apple's valuation, which already trades at a premium to peers. Dell Technologies has gained 238.4 percent year to date, while HP is up 19.2 percent and Alphabet has risen 4.3 percent. Apple's services business, with its high-margin recurring revenue, remains a key driver of the company's profitability as hardware sales mature.

However, supply chain constraints and elevated research and development spending could pressure operating margins in the near term. Apple significantly increased R&D investment to accelerate AI capabilities, custom silicon development and future products, which may keep operating expenses elevated through fiscal 2026. The company acknowledged that iPhone and Mac demand continued to outpace available supply in the June quarter.

Apple also faces growing competition from Chinese smartphone vendors and AI-focused device manufacturers investing aggressively in generative AI and enterprise software. Increasing antitrust scrutiny and App Store regulations could limit Apple's ability to monetize its platform and increase compliance costs over time.

This article is for informational purposes only and does not constitute investment advice.