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

Posted:
in iPhone
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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Comments

  • Reply 1 of 47
    Gotta get rid of our old stock somehow.📱😉
  • Reply 2 of 47
    maestro64maestro64 Posts: 5,035member

    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.

    jbdragonRayz2016
  • Reply 3 of 47
    rogifan_newrogifan_new Posts: 4,297member
    So Apple admitting price matters in certain markets?
    GeorgeBMac
  • Reply 4 of 47
    avon b7avon b7 Posts: 6,236member
    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.


  • Reply 5 of 47
    maestro64maestro64 Posts: 5,035member
    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.
    jbdragonSpamSandwich
  • Reply 6 of 47
    rogifan_newrogifan_new Posts: 4,297member
    maestro64 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.
    So the rest of the world is overpaying to subsidize India? (yes I'm being overly obtuse here)

    Point is price matters more in India than Apple as a status symbol or "premium" product company. I'm glad Apple is recognizing this.
    GeorgeBMac
  • Reply 7 of 47
    jbdragonjbdragon Posts: 2,246member
    maestro64 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.
    So the rest of the world is overpaying to subsidize India? (yes I'm being overly obtuse here)

    Point is price matters more in India than Apple as a status symbol or "premium" product company. I'm glad Apple is recognizing this.
    Is it worth Apple to Devalue the iPhone in India? What does selling cheap iPhones in India really get you? Is Apple really going to play the race to the bottom in profits game, because they'll lose.
    SpamSandwich
  • Reply 8 of 47
    SpamSandwichSpamSandwich Posts: 33,407member
    Stop the bleeding before it starts, Tim. Better to wait for the small number of wealthy Indians to accept Apple than devalue the brand to gain market share.
  • Reply 9 of 47
    Rayz2016Rayz2016 Posts: 6,957member
    So Apple admitting price matters in certain markets?
    Obviously, price matters in every market. Why would anyone think otherwise?

    This is infant school economics. 
    StrangeDays
  • Reply 10 of 47
    @Maestro64 - You are such a troll. US is the 2nd largest polluter in the world, so no, India is not being allowed to pollute while US reduces carbon emissions. The entire world needs to reduce its carbon footprint and with US being the 2nd largest, it also needs to do the same. Reducing the price of iPhone and selling it in a country where people can't afford to buy them at their current price is smart. It doesn't devalue the brand. You are quite ignorant to say things like "Why doesn't India figure out ways for people can make more money". If India did that, then the goods you buy in US, like clothes that are made in India, will cost higher. Are you willing to pay 2x or 10x the price you pay for your clothes just so someone else in another country can buy their iPhones? I bet most of the Americans would not want that!
    edited June 2017 baconstangargonautGeorgeBMac
  • Reply 11 of 47
    Rayz2016Rayz2016 Posts: 6,957member
    "Affordability managers"

    Another term for the new age.

  • Reply 12 of 47
    maestro64 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.
    Its more like the pill cost $0.05 to make and they are sold for $1 in the US, because our government allows them to, while other governments, like Canada, don't allow this nonsense. No company is going to take a loss to sell something.
    baconstangargonautGeorgeBMacsingularity
  • Reply 13 of 47
    maestro64 said:
    So Apple admitting price matters in certain markets?
    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. 
    You might want to educate yourself a bit more before making such sweeping statements that have no basis in facts. The reason drugs cost less in India is that a bunch of Indian pharma companies make generic versions of brand name drugs after R&D. Here's a link that's relevant, though a bit dated:
    http://www.ipsnews.net/2012/09/will-india-still-supply-cheap-drugs-to-the-world/

    That same link will tell you that the WTO and TRIPS agreements now make it next to impossible for Indian companies to continue making those cheap generics. 
    sanitycheckargonautGeorgeBMac
  • Reply 14 of 47
    SpamSandwichSpamSandwich Posts: 33,407member
    @Maestro64 - You are such a troll. US is the 2nd largest polluter in the world, so no, India is not being allowed to pollute while US reduces carbon emissions. The entire world needs to reduce its carbon footprint and with US being the 2nd largest, it also needs to do the same. Reducing the price of iPhone and selling it in a country where people can't afford to buy them at their current price is smart. It doesn't devalue the brand. You are quite ignorant to say things like "Why doesn't India figure out ways for people can make more money". If India did that, then the goods you buy in US, like clothes that are made in India, will cost higher. Are you willing to pay 2x or 10x the price you pay for your clothes just so someone else in another country can buy their iPhones? I bet most of the Americans would not want that!
    China pollutes at twice the amount of the US.
  • Reply 15 of 47
    @Maestro64 - You are such a troll. US is the 2nd largest polluter in the world, so no, India is not being allowed to pollute while US reduces carbon emissions. The entire world needs to reduce its carbon footprint and with US being the 2nd largest, it also needs to do the same. Reducing the price of iPhone and selling it in a country where people can't afford to buy them at their current price is smart. It doesn't devalue the brand. You are quite ignorant to say things like "Why doesn't India figure out ways for people can make more money". If India did that, then the goods you buy in US, like clothes that are made in India, will cost higher. Are you willing to pay 2x or 10x the price you pay for your clothes just so someone else in another country can buy their iPhones? I bet most of the Americans would not want that!
    China pollutes at twice the amount of the US.
    Your point being?

    China isn't the one that is backing away from efforts to reduce its carbon footprint, US is. Countries like China and India are actually on track to exceed their goals that were set out in the Paris agreement.

    Here are my sources:
    https://www.nytimes.com/2017/05/22/opinion/paris-agreement-climate-china-india.html?_r=0
    https://www.washingtonpost.com/world/asia_pacific/as-us-backs-away-from-climate-pledges-india-and-china-step-up/2017/06/01/59ccb494-16e4-4d47-a881-c5bd0922c3db_story.html?utm_term=.fbcc2634ffad

    edited June 2017 argonautanantksundaramStrangeDaysGeorgeBMac
  • Reply 16 of 47
    SpamSandwichSpamSandwich Posts: 33,407member
    @Maestro64 - You are such a troll. US is the 2nd largest polluter in the world, so no, India is not being allowed to pollute while US reduces carbon emissions. The entire world needs to reduce its carbon footprint and with US being the 2nd largest, it also needs to do the same. Reducing the price of iPhone and selling it in a country where people can't afford to buy them at their current price is smart. It doesn't devalue the brand. You are quite ignorant to say things like "Why doesn't India figure out ways for people can make more money". If India did that, then the goods you buy in US, like clothes that are made in India, will cost higher. Are you willing to pay 2x or 10x the price you pay for your clothes just so someone else in another country can buy their iPhones? I bet most of the Americans would not want that!
    China pollutes at twice the amount of the US.
    Your point being?

    China isn't the one that is backing away from efforts to reduce its carbon footprint, US is. Countries like China and India are actually on track to exceed their goals that were set out in the Paris agreement.

    Here are my sources:
    https://www.nytimes.com/2017/05/22/opinion/paris-agreement-climate-china-india.html?_r=0
    https://www.washingtonpost.com/world/asia_pacific/as-us-backs-away-from-climate-pledges-india-and-china-step-up/2017/06/01/59ccb494-16e4-4d47-a881-c5bd0922c3db_story.html?utm_term=.fbcc2634ffad

    The Paris Agreement was a toothless document. If the US was to seriously commit to such an agreement it would have to originate in Congress. The President doesn't create US laws. The whole thing was a poser-fest.
    boltsfan17gatorguy
  • Reply 17 of 47
    @Maestro64 - You are such a troll. US is the 2nd largest polluter in the world, so no, India is not being allowed to pollute while US reduces carbon emissions. The entire world needs to reduce its carbon footprint and with US being the 2nd largest, it also needs to do the same. Reducing the price of iPhone and selling it in a country where people can't afford to buy them at their current price is smart. It doesn't devalue the brand. You are quite ignorant to say things like "Why doesn't India figure out ways for people can make more money". If India did that, then the goods you buy in US, like clothes that are made in India, will cost higher. Are you willing to pay 2x or 10x the price you pay for your clothes just so someone else in another country can buy their iPhones? I bet most of the Americans would not want that!
    China pollutes at twice the amount of the US.
    Your point being?

    China isn't the one that is backing away from efforts to reduce its carbon footprint, US is. Countries like China and India are actually on track to exceed their goals that were set out in the Paris agreement.

    Here are my sources:
    https://www.nytimes.com/2017/05/22/opinion/paris-agreement-climate-china-india.html?_r=0
    https://www.washingtonpost.com/world/asia_pacific/as-us-backs-away-from-climate-pledges-india-and-china-step-up/2017/06/01/59ccb494-16e4-4d47-a881-c5bd0922c3db_story.html?utm_term=.fbcc2634ffad

    The Paris Agreement was a toothless document. If the US was to seriously commit to such an agreement it would have to originate in Congress. The President doesn't create US laws. The whole thing was a poser-fest.
    And so whats the point of backing out of a voluntary ("poser") agreement? - That is something the President did, not Congress.
    argonautanantksundaramStrangeDaysGeorgeBMac
  • Reply 18 of 47
    maestro64maestro64 Posts: 5,035member
    @Maestro64 - You are such a troll. US is the 2nd largest polluter in the world, so no, India is not being allowed to pollute while US reduces carbon emissions. The entire world needs to reduce its carbon footprint and with US being the 2nd largest, it also needs to do the same. Reducing the price of iPhone and selling it in a country where people can't afford to buy them at their current price is smart. It doesn't devalue the brand. You are quite ignorant to say things like "Why doesn't India figure out ways for people can make more money". If India did that, then the goods you buy in US, like clothes that are made in India, will cost higher. Are you willing to pay 2x or 10x the price you pay for your clothes just so someone else in another country can buy their iPhones? I bet most of the Americans would not want that!
    China pollutes at twice the amount of the US.

    and India is the 3rd in the list, so US has been reducing its emission since the 1950/1960's through various means and no country offer to give the US money to do it. My point is the US is not here to subsidize everyone's else economies.
  • Reply 19 of 47
    maestro64maestro64 Posts: 5,035member
    maestro64 said:
    So Apple admitting price matters in certain markets?
    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. 
    You might want to educate yourself a bit more before making such sweeping statements that have no basis in facts. The reason drugs cost less in India is that a bunch of Indian pharma companies make generic versions of brand name drugs after R&D. Here's a link that's relevant, though a bit dated:
    http://www.ipsnews.net/2012/09/will-india-still-supply-cheap-drugs-to-the-world/

    That same link will tell you that the WTO and TRIPS agreements now make it next to impossible for Indian companies to continue making those cheap generics. 


    How do you think those Generic were made who taught them how to do it. What happened in Pham  is happening to Apple being required to manufacture in India and source 30% of the parts in India is exactly what happen to US Phama companies 20 years ago. The US company were forced to set up shop in India transfer the knowledge how to make the them and sell them well below the cost to make them for years to gain some sort of foot hold in the country. I have friends in the Phama industry and spend years going back and forth to India getting this set up. This is what will happen to Apple, they will transfer all the knowledge and then get ripped off. At least in china the people there want to buy US design or made products. In India they are not out buy US branded products.

    Also, No drug made in India will be allow to be sold in the US. The FDA will not allow it since it can not control the production of the drug, as no drug made in the US will be sold in India due to the their requirement for local content. Check on Tylenol, J&J who now owns the production of Tylenol is monitored by the FDA due to the quality issue they had some years back. Do you want to buy drugs from a country like India which does not have same level of controls the US has.

    edited June 2017
  • Reply 20 of 47
    anantksundaramanantksundaram Posts: 20,324member
    Cue the anti-India bigots, per usual. (I am guessing some of you guys are still sore over your low- and mid-level tech jobs being outsourced to India).

    A new iPhone 5 in India is "slashed" to $200? In 2017? Oh, the horror...

    ROTFLMAO. Guess what Walmart was selling new ones for in the US, in 2014?



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