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Saturday, August 15, 2020

Explained: How Apple grew in the middle of a pandemic

Apple’s growth can be attributed primarily to its launch of the iPhone SE even as most of its markets were in the middle of a Covid-19 pandemic-induced lockdown.

Written by Nandagopal Rajan , Edited by Explained Desk | New Delhi | Updated: July 31, 2020 2:49:57 pm
apple, apple q3 results, apple q3 growth, apple iphone se, new iphone se, apple mobile market share, iphone se sales, indian express explained, explained news, Work from home is also helping Apple sell more Macs and iPads across the world, especially in markets like China. Apple headquarters in Cupertino, California. Express Photo by Nandagopal Rajan

Apple has announced its Q3 results for 2020, recording a 11 per cent growth compared to the same period last year. Also, it is the only big smartphone brand to have recorded growth in the quarter, as per research firm Canalys. The results are surprising, coming as it is in the middle of a pandemic. So, how did the tech giant manage to grow when the sector itself was grinding to a halt?

Apple’s growth can be attributed primarily to its launch of the iPhone SE (read our review here) even as most of its markets were in the middle of a pandemic-induced lockdown. Apple’s cheapest iPhone became available just as China, one of its largest markets, was emerging out of the lockdown. The more affordable price tag, along with pent up demand generated by the need to have a good connected device for work, made the phone a runaway success in China. Canalys says trade in deals and other offers too helped Apple rake in the volumes. As a result, Apple’s China market share grew 35 per cent.

Apple usually does not have a new iPhone for Q3. So the iPhone SE has clearly helped in showing better numbers for the quarter in comparison to the last year. The phone could also help it show good numbers in the coming quarter with markets like India going into the festival season along with big online sales.

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The new work from home situation across the world also seems to have helped Apple’s services business, which CEO Tim Cook said grew across all geographies. Apple Music, video, and cloud services area all seeing a spike, along with Apple News and Apple TV+. However, the AppleCare numbers are down as customers were unable to bring in devices for repairs in many parts of the world.

Work from home is also helping Apple sell more Macs and iPads across the world, especially in markets like China. The renewed emphasis on online classes could also push this segment, given that the iPad is already a recommended education device in many countries and that Apple has a head start when it comes to academic content services too.

One of Apple’s pain points in recent years has been its inability to get a lot of users on older iPhones to upgrade. The $399 iPhone SE seems to have also prompted a lot of these users to finally move to a newer phone.

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Canalys Analyst Vincent Thielke said Apple is also demonstrating skills in new user acquisition. “It adapted quickly to the pandemic, doubling down on the digital customer experience as stay-at-home measures drive more customers to online channels.”

However, there is some rough weather ahead as Apple has announced that its iPhone flagship, usually announced in September, could be delayed this year.

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