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
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
8 responses to “Apple’s surge into India may have just hit a roadblock”
No reason for India to allow import of outdated phones when Apple App Store doesn’t even support installing old versions of apps that work on those phones, and in those cases where they do, it doesn’t continue to work as apple ends support for the older phones.
If apple allowed others to open their own app stores like google does with Android, that would be a different issue.
There may be a few apps that would not run, but not many. And the security of an Apple controlled App Store, has appeal to those who value security including potential customers in India. Android’s major appeal is the low price which Apple is partially addressing but iPhones will never be as cheap – but you get what you pay for, and less expensive iPhones should do well. I am not really sure what you are talking about when you say outdated. Just not true.
Actually many apps don’t run on older phones, and many more shortly won’t run as older phones quickly become truly obsolete. Apple changes their OS quickly and does not build in backward compatibility nor do they allow others to do so. Also the older versions of the apps installed become incapable of communicating with their respective web services.
WRT security, as the FBI hacking of the apple phone has shown, there is no apple device on the market today which is secure.
Apple isn’t Google where apps don’t work and often crash many devices.
Google aint selling second rate phones in India.
For sure apple has plans to import older iPhones 5,5C and 5S maybe even the 4S and they for will extend the iOS updates to this phones
Soon there will be 2nd hand iPhone SE which are basically new phones and will be under $150 margin….
Second hand phones are now phones? Do you know what second hand means?
Also the phones have older hardware and software.
Nothing new about them.
Shouldn’t it be up to consumers to decide whether Apple should be allowed to import refurbished iPhones? Any refurbished products I’ve bought from Apple seemed to be as good and as useful as brand-new items. Why would those other companies be so worried about some Apple refurbished products if their own smartphones were that good? This complaint simply seems like a convenient way for these companies to block out some competition. I’m all for the Indians buying their own locally manufactured products but there should be at least some percentage of imported goods being allowed in the country. I’m sure there must be some consumers who would be willing to buy refurbished Apple iPhones. This is just my opinion and I’m not criticizing the Indian council because it’s their country and they should do whatever they think is in the best interest of their country.