Apple Chasing Market Share in India by Letting Retailers Reduce Prices on Older Model iPhones

[MacRumors]

As Apple gears up to sell iPhones directly through its website in India later in 2017, the company's successful sale of older generation iPhones in the country has come to light in a new article by Bloomberg. Within India, Apple has let third-party resellers and shops -- including Amazon and Flipkart -- reduce prices for "retro model" iPhones, because Indian users are said to be willing to concede in performance and specs for a cheaper Apple-branded smartphone.

One of the older iPhones in question is the iPhone 5s, launched in 2013 and replaced by the iPhone SE three years later in 2016. One user in the country described purchasing an iPhone 5s for 20,400 rupees (about $300) at local reseller iPlanet, and Amazon even listed the 5s as low as 15,999 rupees during a sale in May. Right now in the U.S., the cheapest iPhone you can buy is a SIM-free iPhone SE for $399.

Last summer, Apple CEO Tim Cook admitted that iPhones are too expensive in India, saying he wants Indian customers "to be able to buy at a price that looks like the U.S. price." Now, it appears that potential iPhone users in India are being able to do that at even cheaper prices.

Now it's letting stores and online retailers such as Amazon.com Inc. and Flipkart Ltd. slash prices for retro models, a rare concession for a brand that carefully guards its high-end image

"It doesn't bother me that it is several generations old," says Varuni T.V., a business professor in India who teaches at a college in Hospet, a mining town six hours north of Bangalore. "It's a good feeling to own an Apple phone."

Apple shipped 2.6 million devices to India in 2016, and older iPhones accounted for about 55 percent of those devices. In addition to the iPhone 5s, the iPhone 5 and iPhone 6 are said to be popular options at Indian retailers and online stores. The company is believed to be doubling down on this retro iPhone sales idea, hearing retailer pitches about cash-back offers, product exchanges, and monthly payment plans on iPhones, "all aimed at making it easier for young Indians to spend a month's earnings or more on a 5S."

Additionally, Apple will hire "affordability managers" in India, who will negotiate with banks and other money lenders on behalf of potential iPhone buyers, focusing on customers in smaller towns with less of a track record in buying expensive smartphones. Apple's competition in the country is still steep, with Xiaomi and Oppo remaining the dominant forces in the Indian smartphone market.

Analysts remain hopeful for Apple's presence in India, thanks to the onset of iPhone SE production in the country in its Bangalore plant. Next, it's believed that Apple will attempt to begin individual component manufacturing for iPhone devices in India in order to continue establishing its foothold in the country.

Article Link: Apple Chasing Market Share in India by Letting Retailers Reduce Prices on Older Model iPhones

 

[SteveJobs2.0]

Seems similar to haggling for a goat.

 

[H2SO4]

Now it's letting stores and online retailers such as Amazon.com Inc. and Flipkart Ltd. slash prices for retro models, a rare concession for a brand that carefully guards its high-end image.
Seems weird that Apple can get involved in a crude form of price fixing?

 

[nikaru]

I rly doubt that even 1% of the population in India can enter an Apple Store and drop 700$ for a new iPhone. Imagine how much iMac Pros for 4999$ would be sold in India. I guess a few hundred at most. There is extreme poverty in there.

It is like trying to sell brand new Mercedes in Somalia.

 

[69Mustang]

Now it's letting stores and online retailers such as Amazon.com Inc. and Flipkart Ltd. slash prices for retro models, a rare concession for a brand that carefully guards its high-end image.
Seems weird that Apple can get involved in a crude form of price fixing?

That's not really price fixing. It's discounting. Price fixing would be every Indian retailer agreeing to sell iPhones at the same price. To me, this just seems like Apple adjusting to the realities of the market in India. In an atmosphere where downward pressure on price is the SOP, marketshare plays a more important role. Higher profit has to be a future consideration. Getting more of your foot in the door has to take priority... for now.

 

[newdeal]

well hopefully they don't mind buying a device and not being able to get the most recent operating system within a year or two. I suppose that wouldn't be that much different compared to android anyway

 

[Avieshek]

Why not use ‘₹’ the Rupee symbol?

₹15,999.

 

[avtella]

Why not use ‘₹’ the Rupee symbol?

₹15,999.

Because if using a US keyboard it's not an option, rather than going through a separate special symbols section or trying to copy and paste it from somewhere else, it may have been just easier to type Rs. It seems to be inspired by the euro emblem, not that it matters.

 

[HiVolt]

What I find weird, is how Apple can dictate the selling of their product in re-sale environments.

iPhone 5s are no longer made, so all the inventory these resellers have are all from trade-ins or non-Apple refurbishments.

It's like Ford or Chevy telling an independent used car dealer that they're not charging enough for used cars... pretty bizarre.

 

[Cloudkicker]

Now can I aptly state Apple is "flooding the (Indian) market" w/ cheap phones?

It's kind of the go-to retort to Samsung or other manufacturers, when large phone sales numbers are reported here. lol

 

[H2SO4]

That's not really price fixing. It's discounting. Price fixing would be every Indian retailer agreeing to sell iPhones at the same price. To me, this just seems like Apple adjusting to the realities of the market in India. In an atmosphere where downward pressure on price is the SOP, marketshare plays a more important role. Higher profit has to be a future consideration. Getting more of your foot in the door has to take priority... for now.

No you missed it. Now it's letting stores and online retailers…………….. suggests that they are controlling the price does it not?

 

[developer13245]

All this will accomplish is people in the US will be able to buy cheaper iPhones hand carried from India by H-1B visa holders and their families as they travel to / from India.

 

[TheGR]

Yeah, it's terrible that Apple is dumping it's old stuff in the country. But the prices are sometimes too good to beat.

I picked up a 6S for about USD 540 including taxes. Coworker picked up an SE for about 310 USD. Wouldn't have dreamt that we would see lower than US prices in India for Apple products - not sure how they're doing it. Have people pay what they can I suppose.

And these are brand new in the box - purchased from Amazon(.in). Not refurbished. Afaik, Apple is still producing the 5S and 6 for markets like these. The poor blokes buying the 5S (USD 250) or the 6 (USD 340) are going to be super frustrated in a year or two. Back to Android I suppose.

And I'd rather not have any more Mercs / BMWs / Audi / Range Rovers coming over here - no more roads for them to fill up!

 

[69Mustang]

I rly doubt that even 1% of the population in India can enter an Apple Store and drop 700$ for a new iPhone. Imagine how much iMac Pros for 4999$ would be sold in India. I guess a few hundred at most. There is extreme poverty in there.

It is like trying to sell brand new Mercedes in Somalia.

As long as you realize that 1% equates to over 10 million people, I guess you have a point. Not really, but... no, not really at all. The percentage is likely higher meaning the corresponding number of people is also likely higher. There's extreme poverty everywhere, just like there is extreme prosperity.

No you missed it. Now it's letting stores and online retailers…………….. suggests that they are controlling the price does it not?

Gotcha. That last sentence threw me. It reads as if Apple is starting to price fix. Apologies for the misunderstanding.

 

[H2SO4]

As long as you realize that 1% equates to over 10 million people, I guess you have a point. Not really, but... no, not really at all. The percentage is likely higher meaning the corresponding number of people is also likely higher. There's extreme poverty everywhere, just like there is extreme prosperity.


Gotcha. That last sentence threw me. It reads as if Apple is starting to price fix. Apologies for the misunderstanding.

No harm no foul man.

 

[vvs14]

I rly doubt that even 1% of the population in India can enter an Apple Store and drop 700$ for a new iPhone. Imagine how much iMac Pros for 4999$ would be sold in India. I guess a few hundred at most. There is extreme poverty in there.

It is like trying to sell brand new Mercedes in Somalia.

Not letting facts get in the way are we..??

 

[pokerplayer73]

What I find weird, is how Apple can dictate the selling of their product in re-sale environments.

iPhone 5s are no longer made, so all the inventory these resellers have are all from trade-ins or non-Apple refurbishments.

It's like Ford or Chevy telling an independent used car dealer that they're not charging enough for used cars... pretty bizarre.

It's your assumption that the inventory sold is re-furbished or trade-ins. These are all new iPhones being sold.

 

[kshitijshah]

I rly doubt that even 1% of the population in India can enter an Apple Store and drop 700$ for a new iPhone. Imagine how much iMac Pros for 4999$ would be sold in India. I guess a few hundred at most. There is extreme poverty in there.

It is like trying to sell brand new Mercedes in Somalia.

Yeah I guess you have a better understanding of India than Tim Cook or rather than the German luxury car makers for whom India is the fastest growing market or rather for Amazon whose primary focus is India. What do a billion people living in mud huts and charming snakes know ? Ask Sundar Pichai who studied in India and went on to be Google CEO.

Sometimes it's better to come out your pigeon hole and see the changing world so that your kids don't end up with same myopic world view.

 

[jimbobb24]

Just don't update iOS. It will crush your machine to powder. Anything more than 2 updates and you have a brick.

 

[szw-mapple fan]

I rly doubt that even 1% of the population in India can enter an Apple Store and drop 700$ for a new iPhone. Imagine how much iMac Pros for 4999$ would be sold in India. I guess a few hundred at most. There is extreme poverty in there.

It is like trying to sell brand new Mercedes in Somalia.

People were saying this with China and look at the market in China now. Even 1% in countries like China or India is like 10 million people and that percentage will grow quickly in coming years. Even minor price drops could make the iPhone economically viable for millions of people. Besides, while India is indeed quite poor, I think you are vastly underestimating India's wealth. There are around 250,000 people who are of millionaire (USD) status in India.

 

[SoN1NjA]

Dear People of India,

When deciding to purchase an older iPhone, don't purchase the iPhone 6 Plus. Seriously the worst phone I’ve ever owned, which is why it’s going to another home tomorrow.
​

Sincerely,
SoN1NjA of MacRumors

 

[nephron8]

I rly doubt that even 1% of the population in India can enter an Apple Store and drop 700$ for a new iPhone. Imagine how much iMac Pros for 4999$ would be sold in India. I guess a few hundred at most. There is extreme poverty in there.

It is like trying to sell brand new Mercedes in Somalia.

India ain't Somalia.
Stop your delusions. It's fastest growing economy and growing by leaps and bounds.

Get life.

Your apple has slowed down in China and that's why they have no option but to capture Indian market.
[doublepost=1497315098][/doublepost]

Dear People of India,

When deciding to purchase an older iPhone, don't purchase the iPhone 6 Plus.
​

Sincerely,
SoN1NjA of MacRumors

I see far more 7 plus than 6 or 6s plus with crowd here at Bangalore,india.

 

[44267547]

Just don't update iOS. It will crush your machine to powder. Anything more than 2 updates and you have a brick.

I am aware of someone who lives in India and who believes planned obsolescence is a real thing with iOS updates. Complete nonsense and he has no idea what he is talking about. Some People just lie about the most random things. Seems odd to me.

 

[nephron8]

And last but not least. These phones like 5s 6 or se all share components over years.

Over years same component cost to decrease.

Isn't it