Apple Submits Application to Sell Used iPhones in India

[MacRumors]

Apple is gearing up to launch a refurbished iPhone market in India, according to a new report from The Times of India. The company is seeking permission from the Indian government to import pre-owned iPhones into the country, and has submitted a formal request to the ministry of environment and forests to begin doing so.

"An application from Apple regarding import of certified pre-owned iPhones for sale in India and manufacturing certified pre-owned iPhones for sale in India has been received in the ministry of environment and forests," telecom minister Ravi Shankar Prasad said in a written reply to the Parliament of India's Rajya Sabha.

Apple's attempts to set up a used iPhone program in India come after a series of recent reports that point to the company's doubling down on the smartphone market in the country. Earlier in February, Apple was said to be close to opening its own retail locations within India, after having to rely on an "Authorized Mobility Resellers" program due to the country's strict real estate and zoning laws.

Around the same time, Apple confirmed its plans to open a $25 million technology development site in Hyderabad, India that will focus on maps development and house over 150 employees. The Indian government has yet to respond to Apple's newest attempt at bolstering its market share in the country, but if approved it would be the first territory with used iPhones to be sold directly from Apple.

Article Link: Apple Submits Application to Sell Used iPhones in India

 

[ThomasJL]

I'm curious to see what sort of profit margins Apple will demand for pre-owned iPhones. Will Apple's profit strategy in India be in having large profit margins on pre-owned iPhone sales, or will their profit strategy be to sell the pre-owned iPhones at a low profit margin in order to get a large number of people tied in to the Apple app ecosystem?

It's great to see the constant progress that is being made in India under Prime Minister Narendra Modi. Hopefully Modi's "Make In India" campaign will someday lead to Apple doing some manufacturing there as some other smartphone companies have already done.

 

[jayducharme]

According to this article, iPhones seem to be selling pretty well in India, even without the refurbs:

http://techcrunch.com/2016/03/04/ap...n-indias-biggest-cities-than-you-might-think/

 

[2457282]

I suspect that India is similar to China in that only a small minority of the population could realistically afford an iphone - and yet because they have such a large population, even a small minority is in the hundreds of million range. If apple can crack into that group of consumers they will do well indeed.

 

[Kajje]

Apple will do well.

Last month I've seen iPhone 4 units in second hand shops in New Delhi still going for 13,500 Rupees. That's USD 200.
Extra charge for the iPhone 4 blinking GOLD edition. Very popular here.
With a little bit of nego they'll throw in an original box.

Non-original charger + 30 pins cable packages can be found for about USD 1.5.

If you didn't manage to get an original box, stop panicking. Just buy a classifieds newspaper and there's a whole section full of that stuff. Put aside about USD 20 if you fancy one.

 

[iThingsGurl]

Apparently, according to this article, Indian Environment Ministry’s Technical Review Committee has turned down their request twice - the latest on July 2, 2015 - on grounds that it would add to India’s e-waste.

 

[Aston441]

This will decrease availability and increase prices of refurbs for U.S. residents.

 

[kdarling]

According to this article, iPhones seem to be selling pretty well in India, even without the refurbs:

http://techcrunch.com/2016/03/04/ap...n-indias-biggest-cities-than-you-might-think/

That article points out how poorly a regularly (high!) priced iPhone sells in India. at only 0.9% of nationwide sales, which is only about a million a year total. And that's with Apple backed loan partners and trade-in programs.

I'm curious to see what sort of profit margins Apple will demand for pre-owned iPhones. Will Apple's profit strategy in India be in having large profit margins on pre-owned iPhone sales, or will their profit strategy be to sell the pre-owned iPhones at a low profit margin in order to get a large number of people tied in to the Apple app ecosystem?

Good smartphones in India sell for $150. So I think Apple will have to accept much lower margins.

However, Cook will be able to continue to claim high profit margins in earnings calls on "new" devices, while also claiming higher "India sales". He'll leave it to reporters to note that the latter are mostly used units.

It's great to see the constant progress that is being made in India under Prime Minister Narendra Modi. Hopefully Modi's "Make In India" campaign will someday lead to Apple doing some manufacturing there as some other smartphone companies have already done.

Yes, Lenovo moved some production to India and their sales went up.

Of course, there's also some major native Indian smartphone makers, such as Micromax, Karbonn and Lava. One would think the PM would support those over outsiders.

 

[macs4nw]

Is it too obvious to deduce that the opening of that $25 million Hyderabad technology development site, expected to house (create?) over 150 jobs, might be a subtle overture by Apple to help grease the wheels to help overcome "the country's strict real estate and zoning laws?"

Being able to sell 'good-as-new' refurbished, pre-owned, and late-model iPhones at a lower price point in a huge developing market seems like another astute move by Apple to entice more Indian people into their ecosystem.

.....Of course, there's also some major native Indian smartphone makers, such as Micromax, Karbonn and Lava. One would think the PM would support those over outsiders.

While I get your point, that made me chuckle.....

 

[Mad Mac Maniac]

That article points out how poorly a regularly (high!) priced iPhone sells in India. at only 0.9% of nationwide sales, which is only about a million a year total. And that's with Apple backed loan partners and trade-in programs.
.

Not sure where you got that number, but the article seems to indicate to me that iPhone's make up 2.3% of smartphone sales across the country, which is still pretty abysmally small

 

[kdarling]

Not sure where you got that number, but the article seems to indicate to me that iPhone's make up 2.3% of smartphone sales across the country, which is still pretty abysmally small

You're right.

"Apple accounted for less than one percent of smartphone sales nationwide in Q3 2015, but a new report from IDC found it racked up 4.6 percent of sales in India’s top 30 cities — which the analyst firm estimates account for 51 percent of country-wide sales — during the last quarter of business."

The first link showed 0.9% in Q3 2015, but as you noted, IDC now says it's up to 2.3%.

Thanks!

 

[Beenblacklisted]

2% market share in population of nearly 1.3 billion people equals more than total usa sales

 

[kdarling]

2% market share in population of nearly 1.3 billion people equals more than total usa sales

2% of 1.3 billion would be 26 million, which is much less than Apple US sales.

But even that high an amount is not using a valid base number, since a lot of that billion plus Indian population can barely afford a living, much less a smartphone. The Indian smartphone market is only about 1/10th of the population, and most of that will likely be made up of low cost devices.

Google "smartphone sales India.". Smartphone sales in India just passed 100 million a year. Apple's 2+% portion of that is just 2-3 million a year, which is why they need a more affordable option.

 

[Bubba Satori]

2% market share in population of nearly 1.3 billion people equals more than total usa sales

Wonderful example of the misuse of statistics.
Prolly a good idea to avoid them in the future.

 

[Robert.Walter]

My expectation is that Apple will bring jobs to India by locating a refurb center there.

And then sell certified used refurb phones slotting below the iPhone SE line in price.

Win for employment.
Win for folks wanting an iPhone but with limited resources.
Win for Apple to bring customers in and to make a profit on older devices.

 

[jlc1978]

This will decrease availability and increase prices of refurbs for U.S. residents.

Not necessarily. If the pricing is low enough a grey makes could emerge by buying them in India and exporting them to other countries. Should Apple chose to offer a worldwide transferable warranty it could very well drive down the price of used but not Apple referred iPhones.

 

[Jakexb]

I was wondering what they were planning to do with the massive number of used 1 year old phones they're going to get as part of the upgrade program.