Apple’s surge into India may have just hit a roadblock

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Apple supplier is increasing its ability to build masses of iPhones in India
Apple's plans to import used iPhones to India is meeting with opposition.
Photo: Ste Smith/Cult of Mac

Apple’s plan to grow its market in India by selling imported used iPhones is running into problems.

In particular, Apple is being opposed by rival handset makers who worry that letting Apple do this will severely damage initiatives to promote local manufacturing, hurt recycling — and (last but certainly not least) damage their own businesses of selling cheap phones.

“Why even consider allowing import of used phones when import of other used goods such as cars are precluded by 300 percent duty levies?” Ravinder Zutshi, chairman of the recently-formed Mobile and Communications Council, asked in a letter concerning the issue.

Unsurprisingly, the group’s members are made up of companies including Micromax, Intex and Samsung, which happen to be some of India’s biggest phone brands.

Right now, Apple has less than 2 percent of the Indian market, where 4 out of every 5 phones sold cost less than $150 and branded smartphones can cost as little as $35.

Western companies have long offered cheaper “India editions” of products to try and get extra customers. Apple has shown some willingness to do this — either by cutting iPhone prices to get them into more people’s hands, or by introducing lower-cost devices like the iPhone SE aimed at developing markets.

However, there is a limit to how low it can go without damaging its premium brand. This is where Apple’s plan to import and sell refurbished iPhones in India comes in.

But while it makes perfect sense for Apple, it’s not a straightforward proposition. Last year, an Apple application to import used iPhones was rejected by India’s environment minister. Apple is now trying again — which has led to a fresh round of opposition.

To Apple’s advantage, it has recently stated plans to open new flagship Apple Stores in the country, as well as to invest $25 million in a new office complex in India — which will bring approximately 4,500 jobs to the region during the construction process.

According to a report by IDC, increasing phone sales in India is one of the key ways Apple will drive continued growth in its iPhone business.

In 2015, Apple finally surpassed the $1 billion sales mark in India for the first time. If it can successfully earn the right to import used iPhones, look for that number to rapidly rise. But based on reactions to the company’s plans, right now that’s a big “if.”

I wonder how it would be affected if companies like Foxconn and Pegatron began building iPhones in the country, though?

Source: WSJ