Apple hikes most India iPhone prices after tax hike, with iPhone X topping out at $1,647

Posted:
in iPhone
Apple has raised the prices of several iPhone models in India, reacting to a recent increase of import taxes on electronics.




On average, prices have risen 3.5 percent, Reuters reported. A 256-gigabyte iPhone 8 is now 79,420 rupees, or about $1,237, while a 256-gigabyte iPhone X is 105,720 rupees -- roughly $1,647, which in the U.S. would be almost enough before tax to buy 64-gigabyte models of both the iPhone 8 and X.

The exception to the rule is the iPhone SE, which is assembled in Bangalore by Apple partner Wistron.

Last week the Indian government hiked import taxes on cellphones from 10 to 15 percent, hoping to encourage local manufacturing. While that could have little impact on companies like Samsung, which already rely heavily on local manufacturing, as many as 88 percent of iPhones are believed to be imported.

Even the iPhone SE is well beyond the price range of most Indians. This has translated into Apple holding less than three percent of the marketshare in the country, and Apple keeping models on sale that are considered outdated in other markets.

Apple has been looking to expand local manufacturing, but is requesting tax breaks and other handouts in exchange. The Indian government appears reluctant to concede to demands.
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Comments

  • Reply 1 of 34
    macxpressmacxpress Posts: 4,576member
    Here we go with Apple is just trying to grab more and more money out of people again. Don't they already have enough? Is iPhone X really worth the "Apple Tax"?

    /s
    Solijbdragonwatto_cobra
  • Reply 2 of 34
    SoliSoli Posts: 8,283member
    Just a few days ago someone was saying India holds all the cards and Apple none, and yet Apple has raised the price of the iPhone X. 🤔
    jbdragonwatto_cobra
  • Reply 3 of 34
    asdasdasdasd Posts: 5,105member
    Soli said:
    Just a few days ago someone was saying India holds all the cards and Apple none, and yet Apple has raised the price of the iPhone X. ߤ䦬t;/div>
    Not sure what the proves, either way. They are clearly not happy to reduce their profits per device, so they have increased the retail price in line with the tax.

    In terms of growing the market this isnt good news for Apple. 
    edited December 2017 watto_cobra
  • Reply 4 of 34
    SoliSoli Posts: 8,283member
    asdasd said:
    Soli said:
    Just a few days ago someone was saying India holds all the cards and Apple none, and yet Apple has raised the price of the iPhone X. ߤ䦬t;/div>
    Not sure what the proves, either way. They are clearly not happy to reduce their profits per device, so they have increased the retail price in line with the tax.

    In terms of growing the market this isnt good news for Apple. 
    It shows that Apple is more concerned about maintaining a profit margin than kowtowing to a particular market. Apple doesn't need India to survive and they're not certainly not at the mercy of the Indian gov't.
    pscooter63jbdragonwatto_cobra
  • Reply 5 of 34
    Rayz2016Rayz2016 Posts: 4,181member
    asdasd said:
    Soli said:
    Just a few days ago someone was saying India holds all the cards and Apple none, and yet Apple has raised the price of the iPhone X. ߤ䦬t;/div>
    Not sure what the proves, either way. They are clearly not happy to reduce their profits per device, so they have increased the retail price in line with the tax.

    In terms of growing the market this isnt good news for Apple. 
    Was it you that said it then?


  • Reply 6 of 34
    Soli said:
    asdasd said:
    Soli said:
    Just a few days ago someone was saying India holds all the cards and Apple none, and yet Apple has raised the price of the iPhone X. ߤ䦬t;/div>
    Not sure what the proves, either way. They are clearly not happy to reduce their profits per device, so they have increased the retail price in line with the tax.

    In terms of growing the market this isnt good news for Apple. 
    It shows that Apple is more concerned about maintaining a profit margin than kowtowing to a particular market. Apple doesn't need India to survive and they're not certainly not at the mercy of the Indian gov't.
    I guess time will tell. Although India has an emerging middle class I believe the lesser priced iPhones are bigger sellers than the top of the line models. 
  • Reply 7 of 34
    SoliSoli Posts: 8,283member
    spice-boy said:
    Soli said:
    asdasd said:
    Soli said:
    Just a few days ago someone was saying India holds all the cards and Apple none, and yet Apple has raised the price of the iPhone X. ߤ䦬t;/div>
    Not sure what the proves, either way. They are clearly not happy to reduce their profits per device, so they have increased the retail price in line with the tax.

    In terms of growing the market this isnt good news for Apple. 
    It shows that Apple is more concerned about maintaining a profit margin than kowtowing to a particular market. Apple doesn't need India to survive and they're not certainly not at the mercy of the Indian gov't.
    I guess time will tell. Although India has an emerging middle class I believe the lesser priced iPhones are bigger sellers than the top of the line models. 
    India's middle class will be different from the US' middle class. I think it's the growing upper class as industry moves to India like it did with China (albeit at a much slower pace for many reasons) that will be the biggest target for Apple in the coming years. Obviously there will be (upper) middle class that will be able to afford Apple products, as well as want to Apple products as status symbols, but for now that growth area will be anemic. India has about a half-million millionaires (USD) compared to China's 2.5MM (USD) and the US' 7MM. I know India is going to be a major focus for Apple in terms of production and sales, but I think we could be more than a decade away from that happening.
  • Reply 8 of 34
    fallenjtfallenjt Posts: 3,902member
    The idiotic government didn't realize that by increasing import tax, their citizens are the first impacted.
    entropysjbdragonviclauyycwatto_cobra
  • Reply 9 of 34
    This is a classic example and confirmation that corporations do not pay taxes.  They are tax collectors; not tax payers.  If taxes are increased that number gets passed onto the consumer. Raising taxes on corporations does nothing to the corporation. It only hurts the consumer and this is a real-world example.
    edited December 2017 anantksundaramentropysjbdragonZooMigojony0
  • Reply 10 of 34
    fallenjt said:
    The idiotic government didn't realize that by increasing import tax, their citizens are the first impacted.
    Agreed. All it'll do is to encourage a huge gray market in iPhones.

    I am not sure if it'll have a huge impact on Apple's local sales though, since I am assuming others, certainly Samsung, will follow with a similar increase (for their high-end models).

    Btw, what does an iPhone X cost in the EU? Scandinavian countries? China? Australia? Is it all that much lower than these new Indian prices?
    edited December 2017
  • Reply 11 of 34
    tzeshantzeshan Posts: 1,749member
    macxpress said:
    Here we go with Apple is just trying to grab more and more money out of people again. Don't they already have enough? Is iPhone X really worth the "Apple Tax"?

    /s
    Don't complain.  Apple does not make much money from India. iPhone market share is a tiny 2.61% there.
    https://www.statista.com/statistics/262157/market-share-held-by-mobile-operating-systems-in-india/
  • Reply 12 of 34
    tzeshan said:
    macxpress said:
    Here we go with Apple is just trying to grab more and more money out of people again. Don't they already have enough? Is iPhone X really worth the "Apple Tax"?

    /s
    Don't complain.  Apple does not make much money from India. iPhone market share is a tiny 2.61% there.
    https://www.statista.com/statistics/262157/market-share-held-by-mobile-operating-systems-in-india/
    I realize from your past postings that you have some issues with India and Indians, so this might fall on deaf ears. Nevertheless...

    India has nearly 300 million smartphone users, expected to rise to nearly 440+ million by 2022 (same source as you cited: https://www.statista.com/statistics/467163/forecast-of-smartphone-users-in-india/). 2.61% of 300M is 7.83 million iPhones. At an ASP of $600 (conservative), that's $4.7B in sales. At a 25% profit margin, that's $1.17B in profits for Apple currently. At its current PE ratio of ~19x (likely a massive underestimate for Apple in India, given its growth prospects there and the fact that it's a rapidly growing market), that is over $22B in market value.

    Perhaps in your world that is a small number.
    edited December 2017 ben20mknelsonwatto_cobramuthuk_vanalingam
  • Reply 13 of 34
    asdasdasdasd Posts: 5,105member
    Soli said:
    asdasd said:
    Soli said:
    Just a few days ago someone was saying India holds all the cards and Apple none, and yet Apple has raised the price of the iPhone X. ߤ䦬t;/div>
    Not sure what the proves, either way. They are clearly not happy to reduce their profits per device, so they have increased the retail price in line with the tax.

    In terms of growing the market this isnt good news for Apple. 
    It shows that Apple is more concerned about maintaining a profit margin than kowtowing to a particular market. Apple doesn't need India to survive and they're not certainly not at the mercy of the Indian gov't.
    Yet Tim Cook has said the opposite. They are interested in India. This isn’t good news for Apple. 

    Anyway the Indian government want Apple to up prices and lose share unless they comply by sourcing components in India and/or build all their iPhones in India. Apple would be snubbing the government plan if they had swallowed the taxes. 
  • Reply 14 of 34
    asdasdasdasd Posts: 5,105member
    fallenjt said:
    The idiotic government didn't realize that by increasing import tax, their citizens are the first impacted.
    Agreed. All it'll do is to encourage a huge gray market in iPhones.

    I am not sure if it'll have a huge impact on Apple's local sales though, since I am assuming others, certainly Samsung, will follow with a similar increase (for their high-end models).

    Btw, what does an iPhone X cost in the EU? Scandinavian countries? China? Australia? Is it all that much lower than these new Indian prices?
    If not it’s alsio because of taxes. 
  • Reply 15 of 34
    Soli said:
    asdasd said:
    Soli said:
    Just a few days ago someone was saying India holds all the cards and Apple none, and yet Apple has raised the price of the iPhone X. ߤ䦬t;/div>
    Not sure what the proves, either way. They are clearly not happy to reduce their profits per device, so they have increased the retail price in line with the tax.

    In terms of growing the market this isnt good news for Apple. 
    It shows that Apple is more concerned about maintaining a profit margin than kowtowing to a particular market. Apple doesn't need India to survive and they're not certainly not at the mercy of the Indian gov't.
    I was one of the people who said India holds all the cards... in India.  Apple holds no cards in that relationship.  India insists that the cost of doing business in India is "made in India".  Apple can either comply with the regulations or they can deal with the tax burden and raise their pricing equivalently.  If Apple holds true to form, the cost of the assembled SE is going to rise also.  India is getting ready to raise the tax on imported components - which is what the SE is primarily, imported components.  The only choice that Apple has is to manufacture in India or raise the price of the skus to account for the higher tax.  

    No one said Apple needed India to survive.  No one even implied that.  They are at the mercy of the Indian government though... in India.  It's plain to see that Apple wants a bigger foothold in India.  Tim's visits, the Wistron plant, and the desire for Indian stores are evidence of that.  The question now becomes how much is Apple willing to acquiesce to get that bigger foothold.  The way it looks from the outside looking in, India says manufacturing is a must.  They hold all the cards. 
    [Deleted User]muthuk_vanalingam
  • Reply 16 of 34
    Rayz2016Rayz2016 Posts: 4,181member
    asdasd said:
    Soli said:
    asdasd said:
    Soli said:
    Just a few days ago someone was saying India holds all the cards and Apple none, and yet Apple has raised the price of the iPhone X. ߤ䦬t;/div>
    Not sure what the proves, either way. They are clearly not happy to reduce their profits per device, so they have increased the retail price in line with the tax.

    In terms of growing the market this isnt good news for Apple. 
    It shows that Apple is more concerned about maintaining a profit margin than kowtowing to a particular market. Apple doesn't need India to survive and they're not certainly not at the mercy of the Indian gov't.
    Yet Tim Cook has said the opposite. They are interested in India. This isn’t good news for Apple. 


    What, Tim Cook said Apple needs India to survive? They are interested in India, as well as a lot of other countries. And I think the company is stable enough to weather it, no matter how much you wish it were otherwise. 
    watto_cobra
  • Reply 17 of 34
    Rayz2016 said:
    asdasd said:
    Soli said:
    asdasd said:
    Soli said:
    Just a few days ago someone was saying India holds all the cards and Apple none, and yet Apple has raised the price of the iPhone X. ߤ䦬t;/div>
    Not sure what the proves, either way. They are clearly not happy to reduce their profits per device, so they have increased the retail price in line with the tax.

    In terms of growing the market this isnt good news for Apple. 
    It shows that Apple is more concerned about maintaining a profit margin than kowtowing to a particular market. Apple doesn't need India to survive and they're not certainly not at the mercy of the Indian gov't.
    Yet Tim Cook has said the opposite. They are interested in India. This isn’t good news for Apple. 


    What, Tim Cook said Apple needs India to survive? They are interested in India, as well as a lot of other countries. And I think the company is stable enough to weather it, no matter how much you wish it were otherwise. 
    The only person to claim Apple needs India to survive is Soli.  No one else made that claim.  That is false narrative to deflect from the fact that Apple is not in a position of negotiating power in India.  The Indian government holds those cards.  That has nothing to do with Apple's survival.
    muthuk_vanalingam
  • Reply 18 of 34
    SoliSoli Posts: 8,283member
    Soli said:
    asdasd said:
    Soli said:
    Just a few days ago someone was saying India holds all the cards and Apple none, and yet Apple has raised the price of the iPhone X. ߤ䦬t;/div>
    Not sure what the proves, either way. They are clearly not happy to reduce their profits per device, so they have increased the retail price in line with the tax.

    In terms of growing the market this isnt good news for Apple. 
    It shows that Apple is more concerned about maintaining a profit margin than kowtowing to a particular market. Apple doesn't need India to survive and they're not certainly not at the mercy of the Indian gov't.
    I was one of the people who said India holds all the cards... in India.  Apple holds no cards in that relationship.  India insists that the cost of doing business in India is "made in India".  Apple can either comply with the regulations or they can deal with the tax burden and raise their pricing equivalently.  If Apple holds true to form, the cost of the assembled SE is going to rise also.  India is getting ready to raise the tax on imported components - which is what the SE is primarily, imported components.  The only choice that Apple has is to manufacture in India or raise the price of the skus to account for the higher tax.  

    No one said Apple needed India to survive.  No one even implied that.  They are at the mercy of the Indian government though... in India.  It's plain to see that Apple wants a bigger foothold in India.  Tim's visits, the Wistron plant, and the desire for Indian stores are evidence of that.  The question now becomes how much is Apple willing to acquiesce to get that bigger foothold.  The way it looks from the outside looking in, India says manufacturing is a must.  They hold all the cards. 
    So Apple is still making a profit in India and isn't being railroaded by the Indian gov't. to do their bidding, so Apple clearly holds some cards. This notion that a company is "at the mercy" of a gov't. holds true of any company in any country in the most superficial sense, so suggesting that Apple has no leg to stand on or no recourse in generating revenue or profit, creating inroads on their own terms, or making Apple a high-end staple with your "holds all the cards" comment is patently false.

    Apple wanting to do more business in India is no different than Apple warning to do more business in any other country so suggesting that such a desire means Apple has no leverage is also false.

    Brasil is more direct comparison to India in that they have high tariffs for imported goods, wants Foxconn to produce x-quanity in order to get y-reduction in z-product, and has a poor exchange rate with the US with a very unbalanced economy, so you would you also claim that Apple holds no cards when doing business there? I sure hope not.
    appletreewickpscooter63
  • Reply 19 of 34
    entropysentropys Posts: 1,241member
    Apple is not going to charge a lower pretax price for an iPhone (or any other manufacture of high end imports for that matter) in India compared with anywhere else in the world. This is just a classic proof of what happens when a government interferes in the market.
    • Raise taxes and thus the price of the product rises too.
    • Higher price means less product is sold at the margin
    • those that do buy the product have less money to use to buy other goods
    • strategies to get around the tax result in grey markets, smuggling and other types of corruption, encouraging other negative behaviours in other parts of the economy
    • at the margin some local jobs are created to get around the tax. They are inefficient, divert the economy away from more productive uses, and last only as long as the tax is in place.
    • other growing Indian industries that may benefit from cheaper smartphones, and iPhones in particular, are able to benefit and grow that little bit less as the cost of using them rises.
    Again and again around the world this style of tariff protection is imposed and raises costs for domestic consumers, reduces availability of the best products, reduces the local economy overall, inferior product gets made locally at a higher cost than the equivalent import, and the jobs created are never compared with what could have been, the never created jobs in other parts of the economy. The irony is those jobs only last as long as the tariff/tax/other form of protection.
    As an example of the end result of this, see the Australian car industry. Seventy years of tariffs, taxes, subsidies, special design rules etc to bolster a domestic car manufacturing industry resulted in

    • inferior local versions of global cars better built elsewhere
    • locally designed and built cars inferior to cars built elsewhere. The best that can be said is that they weren’t built as bad as the cars built behind the iron curtain back in the day.
    • wages for car factory workers higher than other factory workers due to ability to extract rent along with the foreign company with local production because of the tariff/tax applied to imports allows them to charge higher prices at greater profit
    • people drive around in older, less safe, lower specification cars because they are less able to afford a replacement.
    The kicker of course is once these protections were phased out the local industry and its jobs disappeared. This will be the same in India.  
    The difference between India and China is stark. China gives tax breaks to export oriented products designed to grow exports, India raise taxes and tariffs on imports to promote import replacements. Result is India’s economy does not grow like China’s.


    edited December 2017 rwx9901
  • Reply 20 of 34
    Soli said:
    Soli said:
    asdasd said:
    Soli said:
    Just a few days ago someone was saying India holds all the cards and Apple none, and yet Apple has raised the price of the iPhone X. ߤ䦬t;/div>
    Not sure what the proves, either way. They are clearly not happy to reduce their profits per device, so they have increased the retail price in line with the tax.

    In terms of growing the market this isnt good news for Apple. 
    It shows that Apple is more concerned about maintaining a profit margin than kowtowing to a particular market. Apple doesn't need India to survive and they're not certainly not at the mercy of the Indian gov't.
    I was one of the people who said India holds all the cards... in India.  Apple holds no cards in that relationship.  India insists that the cost of doing business in India is "made in India".  Apple can either comply with the regulations or they can deal with the tax burden and raise their pricing equivalently.  If Apple holds true to form, the cost of the assembled SE is going to rise also.  India is getting ready to raise the tax on imported components - which is what the SE is primarily, imported components.  The only choice that Apple has is to manufacture in India or raise the price of the skus to account for the higher tax.  

    No one said Apple needed India to survive.  No one even implied that.  They are at the mercy of the Indian government though... in India.  It's plain to see that Apple wants a bigger foothold in India.  Tim's visits, the Wistron plant, and the desire for Indian stores are evidence of that.  The question now becomes how much is Apple willing to acquiesce to get that bigger foothold.  The way it looks from the outside looking in, India says manufacturing is a must.  They hold all the cards. 
    So Apple is still making a profit in India and isn't being railroaded by the Indian gov't. to do their bidding, so Apple clearly holds some cards. This notion that a company is "at the mercy" of a gov't. holds true of any company in any country in the most superficial sense, so suggesting that Apple has no leg to stand on or no recourse in generating revenue or profit, creating inroads on their own terms, or making Apple a high-end staple with your "holds all the cards" comment is patently false.

    Apple wanting to do more business in India is no different than Apple warning to do more business in any other country so suggesting that such a desire means Apple has no leverage is also false.

    Brasil is more direct comparison to India in that they have high tariffs for imported goods, wants Foxconn to produce x-quanity in order to get y-reduction in z-product, and has a poor exchange rate with the US with a very unbalanced economy, so you would you also claim that Apple holds no cards when doing business there? I sure hope not.
    "So Apple is still making a profit in India and isn't being railroaded by the Indian gov't. to do their bidding, so Apple clearly holds some cards. " - Why do you do this?  Introduce false narratives and argue them.  Who said Apple was being railroaded?  Soli.  Who questioned whether or not Apple is making a profit?  Soli.  Who suggested Apple had no leg to stand on or no recourse in generating revenue? Soli.  Who said Apple needed India to survive? Soli.  It's all deflection.  

    India holds the cards in that relationship.  As of right now, Apple has two choices.  1. Apple can comply and manufacture in India.  2. Not comply and get taxed on their assembled goods and imported goods.  That's it.  Of course they will continue negotiating, but there is no doubt they aren't negotiating from an advantageous position.


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