Apple floats idea of refurb iPhone sales as condition of local manufacturing in India

AppleInsider

Apple is looking to revive the idea of importing and selling refurbished iPhones in India as a possible condition of it starting local manufacturing in the country, a report said on Monday.

The company is now claiming it will have the manufacturing infrastructure to meet quality standards, according to a Bloomberg source. The person noted that the idea is included in Apple's "wish list" of concessions, which also mentions waivers on import duties and even a 15-year tax holiday on imported parts and equipment.

The new plan would allegedly meet environmental standards as well, and be open to third-party vetting.

If Apple were to win permission to import refurb phones, it would mark a first for any electronics vendor in India. Apple's last attempt was turned down in May, with commerce and industry minister Nirmala Sitharaman saying that the government didn't want any used phones on sale, "however certified they may be."

Both government officials and other businesses expressed concerns that allowing Apple and other vendors to import used phones would flood the market with cheap goods, and by extension undermine the government's "Make in India" program, designed to boost local manufacturing.

For Apple, refurb phones might allow it to advance beyond its miniscule marketshare in the region. Though it does dominate the high-cost "premium" segment, it sold just 2.5 million phones in India during the whole of 2016, giving it a 2 percent share of the country's broader smartphone sector.

The main issue is price. Most phones in India sell for under $200, putting even an iPhone SE out of the average person's range. To compensate, Apple has been keeping otherwise outdated iPhones on sale -- some third-party stores are encouraging people to upgrade to 2013's iPhone 5s. If it can begin local manufacturing, Apple will at least be able to lower prices by virtue of avoiding a 12.5 percent import duty.

The company's rumored Indian manufcturing partner, Wistron, could theoretically begin work as soon as April, depending on whether Apple gets government approval. That may be essential if Wistron is to contribute to 2017 iPhones, given that iPhone manufacturing starts months ahead of Apple's usual fall release dates.

jakeb

This could be big. 

radarthekat

sog35 said:

Awesome.

India next.

Then Southeast Asia. Then Africa.

Once its complete, iPhone worldwide share will double to 30%

Here in the Philippines there are already authorized Apple resellers, like this iStore in Cebu, that bring the Apple experience and even a very nice Apple-like retail presence to locales here.  I'm always amazed how many Filipinos I see carrying an iPhone, given the high markups on them compared to the cheaper Android phones that are much more afffordable to the average person. 

Notsofast

That's because you may be underestimating how much people value the Apple ecosystem. Not to mention, those who value privacy and security.  Oh, and there's that unparalleled customer service and consistent quality ratings.  Yes, lots of reason for folks to buy Apple over the cheaper Androids.

dick applebaum

Mmm...

If Apple is going to manufacture new iPhones in India, why couldn't they refurbish old iPhones in India?

gatorguy

dick applebaum said:

Mmm...

If Apple is going to manufacture new iPhones in India, why couldn't they refurbish old iPhones in India?

They want tax credits and wavers to do so as I'm reading it. Even more important they want to do so for direct selling in the India market since such a large percentage of its populace could not afford even a three year old 5s no matter how much they'd like to be Apple users. As the laws stand they can't do that.

By getting their way they could sell bargain-basement used iPhones if they really wanted to compete with new budget handsets already being sold there. Tying new blood into the Apple ecosystem is valuable even if Apple doesn't make anything to speak of on that iPhone itself. 

avon b7

I don't like the idea of them pushing for tax waivers nor the idea of possibly using the country as a kind of outlet country. The devil will be in the details but on taxes, I'd rather they accepted the standard rate and helped towards developing the country even if it meant developing a new phone, sold as new for that specific market, which is huge. If they decide to manufacturer new phones for more developed markets Apple would already be in a winning position due to lower labour costs. Skilled labour might not be an issue as India (and Brazil) are both countries full of contrasts.. in fact not dissimilar to China in many ways. However, as I said, the devil is in the details, which we might never see.

gatorguy

sog35 said:

avon b7 said:

I don't like the idea of them pushing for tax waivers nor the idea of possibly using the country as a kind of outlet country. The devil will be in the details but on taxes, I'd rather they accepted the standard rate and helped towards developing the country even if it meant developing a new phone, sold as new for that specific market, which is huge. If they decide to manufacturer new phones for more developed markets Apple would already be in a winning position due to lower labour costs. Skilled labour might not be an issue as India (and Brazil) are both countries full of contrasts.. in fact not dissimilar to China in many ways. However, as I said, the devil is in the details, which we might never see.

taxing corporations is never the answer.

You tax corporations more, and they simply pass on the tax to consumers.

Besides all Apple profits get taxed TWICE.  First Apple Inc gets taxed the corporate rate. Then Apple shareholders get taxed on dividends. And then when shares are sold the former owners get taxed AGAIN.

It's worked out so well for the Irish eh, where the elite took advantage of it. For a contrary argument:
http://www.alternet.org/economy/4-reasons-why-corporate-income-tax-should-be-doubled-not-abolished

avon b7

sog35 said:

avon b7 said:

I don't like the idea of them pushing for tax waivers nor the idea of possibly using the country as a kind of outlet country. The devil will be in the details but on taxes, I'd rather they accepted the standard rate and helped towards developing the country even if it meant developing a new phone, sold as new for that specific market, which is huge. If they decide to manufacturer new phones for more developed markets Apple would already be in a winning position due to lower labour costs. Skilled labour might not be an issue as India (and Brazil) are both countries full of contrasts.. in fact not dissimilar to China in many ways. However, as I said, the devil is in the details, which we might never see.

taxing corporations is never the answer.

You tax corporations more, and they simply pass on the tax to consumers.

Besides all Apple profits get taxed TWICE.  First Apple Inc gets taxed the corporate rate. Then Apple shareholders get taxed on dividends. And then when shares are sold the former owners get taxed AGAIN.

Well, not taxing them isn't the answer either.

This is ideology. I would prefer balanced taxes, transparency and accountability. I tend to sway towards things like universal quality healthcare and education. Environmental care etc. I don't like to be pigeon holed in politics, preferring instead a problem/solution stance that is free from party politics. I accept that you make take a different stance.

On the subject of taxes, I think they are vital for the healthy running of everyday life. I believe that taxes should be proportional but if you fall into the 'wealthy' group you should pay a little more without being 'punished' for being wealthy through extreme taxation. If you run up a defecit, austerity is a requirement but it should not strangle you to death.

I dispute much of what you say on double taxation but if that's what you believe, fine.

In this particular case it's difficult to form an opinion as we don't know the details but as a guiding line I don't like it when mega corporations start putting conditions on the table. For strategic policy it would make sense for Apple to lower its dependence on Asia and specifically China as we move into a period of potential geo political turbulence. In that sense both India and Brazil would appear to be appropriate for manufacturing diversification.

I would like to see India stand firm in its requirements and negotiate on the finer points only but I would say that in any situation where a multinational starts to table 'demands' that alter the field of play in return for investment.

GeorgeBMac

sog35 said:

avon b7 said:

I don't like the idea of them pushing for tax waivers nor the idea of possibly using the country as a kind of outlet country. The devil will be in the details but on taxes, I'd rather they accepted the standard rate and helped towards developing the country even if it meant developing a new phone, sold as new for that specific market, which is huge. If they decide to manufacturer new phones for more developed markets Apple would already be in a winning position due to lower labour costs. Skilled labour might not be an issue as India (and Brazil) are both countries full of contrasts.. in fact not dissimilar to China in many ways. However, as I said, the devil is in the details, which we might never see.

taxing corporations is never the answer.

You tax corporations more, and they simply pass on the tax to consumers.

Besides all Apple profits get taxed TWICE.  First Apple Inc gets taxed the corporate rate. Then Apple shareholders get taxed on dividends. And then when shares are sold the former owners get taxed AGAIN.

Ahhh...  I feel so badly for the freeloader TeaPots who want to take advantage of societal benefits without having to pay for them.   They prefer corporate welfare to corporate taxes...