Apple is giving iPhone retailers in India permission to slash prices in a bid to boost sales.
Even the company’s older handsets are still too expensive for the vast majority of local consumers, and sales are suffering as a result. Apple has no choice but to cut prices if it wants to be successful in one of the world’s fastest-growing smartphone markets.
Apple has been trying its best to establish itself in emerging markets like India, where smartphone sales are predicted to surpass 1 billion units over the next five years.
“We’re very optimistic about our future in this remarkable country, with its very large, young, and tech-savvy population, fast-growing economy, and improving 4G network infrastructure,” said CEO Tim Cook during an earnings call last month.
But the high price of the iPhone is making Apple’s plan difficult. Apple shipped just 2.6 million units in India last year — claiming just 3 percent of overall handset sales — and 55 percent of those were older models, which still command hefty price tags.
In an effort to boost sales going forward, Apple has given third-party retailers like Amazon and Flipkart permission to cut those price tags, Bloomberg reports. It’s “a rare concession for a brand that carefully guards its high-end image,” the report reads.
The short-term hit should lead to long-term gain, however. The more units Apple can shift, the more people it has using services like the App Store and iTunes. “The bigger the iOS base, the brighter Apple’s future in India,” said Anshul Gupta, research director at Gartner.
In addition to price cuts, some retailers have been offering other incentives, like cash back, product exchanges, and monthly payment plans — all designed to make the iPhone more affordable. Apple has also slashed iPhone prices itself in the past.