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Apple working to import & sell pre-owned iPhones in India, report says

Apple is seeking government approval to import and resell used iPhones in India, according to a statement by the country's telecommunications minister on Friday.

"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," Ravi Shankar Prasad wrote to the Rajya Sabha, the country's upper house of Parliament, according to the Times of India. Prasad added, however, that the government has yet to greenlight anything.

It's not clear which models Apple might choose to import, but the move is presumably a tactic to further penetrate the Indian smartphone market. Even with recent growth, Apple controls a small fraction of sales in the country, where it's dwarfed by competitors like Samsung and Micromax. Those companies are better able to compete on price, as current-generation iPhones are often well beyond the means of local shoppers.

Apple only recently dropped the iPhone 4S and 5c in India. Keeping the 4S on sale allowed the company to offer a phone for Rs. 12,000, or roughly $175.

Apple's footprint in the region is set to intensify in the next year, with a new development office opening in Hyderabad, and the possibility of the country's first Apple Stores.

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7 Comments

slprescott

said about 8 years ago

When Apple sells a USED phone, may they count that as a "sale" in the metrics they report to Wall Street? Or in metrics that analysts use to compare marketshare among major device vendors?

cnocbui

said about 8 years ago

I wonder if there might be a tax minimisation angle?....

cws

said about 8 years ago

Now THAT is a brilliant strategy! Use the phones from their trade-in program to kick-start the market in India and other developing countries. Once these new customers get tied into the iOS ecosystem they will likely stay and may eventually make the move to buying a new phone at full price.

Marvin

said about 8 years ago

slprescott said:

When Apple sells a USED phone, may they count that as a "sale" in the metrics they report to Wall Street? Or in metrics that analysts use to compare marketshare among major device vendors?

It should be possible to count it as a full sale the same as a refurb. Apple's device upgrade program will link in with this because they take old phones off people when they upgrade so every year they will get tens of millions of used phones traded in, which they can ship out to lower income areas and sell them again. They essentially sell the same device twice at different price points but the original buyer never pays the full price of the phone because they upgrade every year.

Take a $650 new iPhone, the initial buyer would pay around half over the first year ($389) and then upgrade to the new model. Apple gets that phone back and sells it on to a lower income market, possibly at around half the price, say $350-400 so heavily discounted from the initial launch but they always get the full revenue for every device sold. If they extend the program to used sales again e.g having say $15-20/month upgrade program, they can have another tier and hit the ~$200 market with a 2 year old phone so for every single device they make, they mark 3 separate sales with revenues of $389 1st year + $180 2nd year + $200 3rd year (3rd year is higher than 2nd as it's not on an upgrade program) = $769 per device.

This setup would keep people upgrading regularly and allow Apple to expand into lower income markets without making low-end devices specifically for them. They get the same high-end models as everyone else, just later but guaranteed to be a fraction of the initial sale price. There would probably be a shortage of old models because the lower incomes brackets are much higher in number but that keeps demand healthy and with 3 tiers, they'd be able to shift potentially over 600 million units per year, which has a knock-on effect for their services and accessories revenue.

anantksundaram

said about 8 years ago

cws said:

Now THAT is a brilliant strategy! Use the phones from their trade-in program to kick-start the market in India and other developing countries. Once these new customers get tied into the iOS ecosystem they will likely stay and may eventually make the move to buying a new phone at full price.

They HAVE to develop the ecosystem first and foremost -- or at least, rapidly alongside -- since India has a richly-developed, deeply-embedded (if not the highest quality) popular music, movie, and television industry. Bollywood and its spinoff show are just a massive business. Throw in access to US and British entertainment options as well (there's a large English-speaking population), and it'll be a home run.... I mean, sixer.

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