Apple allowing retailers to slash pricing on older iPhones to gain traction in India

The business realities of India as a market have pushed Apple to allow authorized vendors to cut prices dramatically in India on older phones, dating as far back as the iPhone 5.

A report on Monday morning from Bloomberg, citing market research studies, claims that the iPhone 5S, and other older iPhones, make 55 percent of the shipments of Apple devices to India. As part of the initiative, the India market has phones as early as the iPhone 5, all the way up to the iPhone 7 for sale at varying price points from around $200 for the iPhone 5, to $800 and up for the iPhone 7.

Apple is reportedly hiring "affordability managers" in India to make deals with banks and lenders on behalf of buyers of Apple's devices.

"We're very optimistic about our future in this remarkable country," Apple CEO Tim Cook said in May about India. Cook cited "its very large, young, and tech-savvy population, fast-growing economy, and improving 4G network infrastructure" as reasons behind the push into the country.

It is unclear exactly how many of Apple's iPhone SE will be built in the Bangalore plant. Apple previously called the it a "small number" being produced, with the Bloomberg report claiming a "couple thousand" would be built in the trial run.

Also unclear is how the India-produced iPhone SE will be priced. The 32GB variants of the iPhone SE sells for $399 in the United States, third-party resellers in India are selling models assembled in China for as low $320.

A report in May claimed that officials in the Indian government hope the new price for the iPhone SE will drop down by as much as $100 compared to the current local price. Even at a $100 reduction, the iPhone SE would still be seen as expensive compared to the rest of the market, with research firm IDC estimating the average smartphone price in India at around $150.

Apple was pushed into starting handset production in India in order to gain access to the local market with its own stores. As part of local sourcing requirements for launching retail stores in the country, rather than relying on the current network of authorized resellers, Apple would have to source at least 30 percent of its products from India.

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47 Comments

ljm828312 9 Years · 27 comments

About 7 years ago

Gotta get rid of our old stock somehow.📱😉

maestro64 19 Years · 5029 comments

Why doesn't India figure out ways for people can make more money instead of feeding into this whole notion that you have to lower the cost of an items just so people can afford it. Indian's Middle class is closer to the US poor class. China found ways so its population could earn a higher wage in India they are trying to find ways to pay its people less so they can do jobs which people in the US use to do at a higher wage like IT support, call centers, and so on. IT professional in the US making $80K to $120 is being replaced with someone making $20K to $30K. India managed to devalue a profession down to the work poor class. They doing the same thing with engineering, they produce so many engineers and IT people that it is driving the wages down.

Someone making $20K per year is not going to spend $500 on a phone, then have to pay for cell service and data.

I just hope Apple does not get dragged down in the race to the bottom in India. That country has destroyed more cell phone companies try to compete there.

rogifan_new 9 Years · 4297 comments

So Apple admitting price matters in certain markets?

avon b7 20 Years · 8046 comments

ljm828312 said:

Gotta get rid of our old stock somehow.📱😉

Apple has no option if it wants to have a healthy presence in India. They can sell a lot of expensive phones. India has customers who can afford them but if they really want to make India a key market they will have to discount older phones or enter a lower tier.

If they don't, competitors will just eat up that band and leave the crumbs for Apple.

Although not front page news, I see a lot of older iPhones (and iPads) on retail store shelves here in Spain and the iPhone 6 is still officially available through some channels in the UK and sold as 'new' as opposed to old stock.

rogifan_new said:

So Apple admitting price matters in certain markets?

Actually, It just means the margins the rest of the world is paying to Apple will subsidize the sales to people in India. The same thing happens in pharmaceuticals, drugs which we pay a $1 a pill here in US sells for $0.10 in India, the pill still costs $0.50 to make but the margins they make off US sales helps support sales in other countries like India. It was the same deal India did with the climate, they can continue putting carbon in the air while the US is reducing and the US pays them $3B every year to move away form Carbon producing solutions.