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.
You said that Apple holds no cards. Nothing. Zero cards means zero play. What other scenario is there in your mind if a gov't is using this absolute position of power to keep competition from occurring? You said they have no leg to stand on when you said Apple has no play in the India market.
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.
Again, that's any company in any county because they all have rules that need to be followed and/or deals that need to be made to function in that country.
Of course they will continue negotiating, but there is no doubt they aren't negotiating from an advantageous position.
1) According to your own statements Apple has nothing to offer in a negotiation… or, do you want to admit that your comment was hyperbole.
2) A reasonable statement is just to say that the India is not the most ideal market for Apple's product and ethos at this time.
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.
Maybe not to survive but India is (or seems like it is heading in the direction) to be more important fairly soon.
As long as Apple has phones at a lower level which they can actually sell, the X in India isn't really important.
What is all his card holding rubbish? India has chosen a lesser, inward looking path. Apple isn’t interested in charging lower wholesale in one market (India) compared with all its other markets around the world. Result is a higher price. The same protectionist story, endlessly repeated over and over, the only differences is the countries and products involved. Never worked out in the long run everytime it was applied in the past, but there is always the hope it will work next time. Ha!
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.
You said that Apple holds no cards. Nothing. Zero cards means zero play. What other scenario is there in your mind if a gov't is using this absolute position of power to keep competition from occurring? You said they have no leg to stand on when you said Apple has no play in the India market.
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.
Again, that's any company in any county because they all have rules that need to be followed and/or deals that need to be made to function in that country.
Of course they will continue negotiating, but there is no doubt they aren't negotiating from an advantageous position.
1) According to your own statements Apple has nothing to offer in a negotiation… or, do you want to admit that your comment was hyperbole.
2) A reasonable statement is just to say that the India is not the most ideal market for Apple's product and ethos at this time.
So now India is using their position of power to keep competition from occurring? Wut? How about we just agree to disagree. I seriously find it hard to have a discussion when you introduce some new narrative with every quote.
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.
I don't know why people can't figure this out. Ya, Tax the hell out of those EVIL Oil company's. Guess what, they pass those taxes right to you with higher gas prices. Corporations don't pay taxes. YOU pay the taxes. Oh sure they get the tax bill, but you're the one paying the higher prices for the product.
Trying to get company's to make a product in your country by raising Import Taxes like this, effects your own people with higher cost products, and things Exported from India to other country's, they can do the SAME THING, high Import of India products where people aren't going to pay the prices. You now have a trade war. It's beyond silly to think company's are just going to make their product in a 100 different country's all to save on a high Import Tax!!! It's a global economy. The iPhone may be built in Foxconn, but it gets parts from around the world including the U.S.
I would say F them. Keep Importing the phones and the people will pay the high taxes as a result. Apple can't go caving in to crap like this. Then it just spreads to other country's that will try and do the same thing. Let the people PAY those taxes. There's no money to be made in cheap phones. Let those company's play that game and go out of business. I think the U.S. Government should raise the Import taxes on some Indian products. Fair is Fair!!!!
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.
You said that Apple holds no cards. Nothing. Zero cards means zero play. What other scenario is there in your mind if a gov't is using this absolute position of power to keep competition from occurring? You said they have no leg to stand on when you said Apple has no play in the India market.
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.
Again, that's any company in any county because they all have rules that need to be followed and/or deals that need to be made to function in that country.
Of course they will continue negotiating, but there is no doubt they aren't negotiating from an advantageous position.
1) According to your own statements Apple has nothing to offer in a negotiation… or, do you want to admit that your comment was hyperbole.
2) A reasonable statement is just to say that the India is not the most ideal market for Apple's product and ethos at this time.
So now India is using their position of power to keep competition from occurring? Wut? How about we just agree to disagree. I seriously find it hard to have a discussion when you introduce some new narrative with every quote.
According to you they are, or is "they are at the mercy of the Indian government" just more hyperbole not to be taken at face value.
Note: In your comments where you try to defend your stance that Apple has no play in the India market (i.e.: holds no cards) you inadvertently keep demonstrating the options Apple has (i.e.: plays they can make without being forced to fold their hand).
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"?
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.
Your math is incorrect. Let me help you with the math. Apple sold 7.83 million iPhones to India not in last quarter or last year. It is over several years. You cannot multiply $1.17B by its PE to get a $22B in market value.
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"?
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"?
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.
India is also one of the poorest countries in the world. That is a big number in my world and Apple should do it's share and provide jobs there https://en.wikipedia.org/wiki/Poverty_in_India
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"?
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.
Your math is incorrect. Let me help you with the math. Apple sold 7.83 million iPhones to India not in last quarter or last year. It is over several years. You cannot multiply $1.17B by its PE to get a $22B in market value.
Looking at the claims it’s 2.61% of sales and not user base. Usually the longevity advantage iPhone have over android means that Apple has a larger user base than implied by the 10% worldwide sales percentage iOS gets...however the average age of phones in India was 6-8 years in 2013 according to an article I read. 2016 annual sales were like 160M (going from memory).
i should double check these numbers like I usually do but I’m too sleepy. They are in the right ballpark but don’t be surprised if they are off a little.
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.
I don't know why people can't figure this out. Ya, Tax the hell out of those EVIL Oil company's. Guess what, they pass those taxes right to you with higher gas prices. Corporations don't pay taxes. YOU pay the taxes. Oh sure they get the tax bill, but you're the one paying the higher prices for the product.
Trying to get company's to make a product in your country by raising Import Taxes like this, effects your own people with higher cost products, and things Exported from India to other country's, they can do the SAME THING, high Import of India products where people aren't going to pay the prices. You now have a trade war. It's beyond silly to think company's are just going to make their product in a 100 different country's all to save on a high Import Tax!!! It's a global economy. The iPhone may be built in Foxconn, but it gets parts from around the world including the U.S.
I would say F them. Keep Importing the phones and the people will pay the high taxes as a result. Apple can't go caving in to crap like this. Then it just spreads to other country's that will try and do the same thing. Let the people PAY those taxes. There's no money to be made in cheap phones. Let those company's play that game and go out of business. I think the U.S. Government should raise the Import taxes on some Indian products. Fair is Fair!!!!
Some great points. If we went to the FairTax none of this would be an issue at least here in the states. No corporate taxes. Period.
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?
I think America should do this too. Modi is smart. Trump should do this too.
I find it funny that people criticize India, China et all for protecting their own interests by taxing imports excessively. Isn't this exactly what daddy Trump is trying to do also in the USA to make it great again? lol
I think it's a great idea personally, I'd like the UK to do the same when we leave EU. It might be tough and expensive initially, but it'll foster local manufacturing and encourage the country to be self sufficient. If people really want something from another country, they will buy it regardless of cost - look at those that paid over 2k for an iPhone X on ebay etc.
I don't know why people can't figure this out. Ya, Tax the hell out of those EVIL Oil company's. Guess what, they pass those taxes right to you with higher gas prices. Corporations don't pay taxes. YOU pay the taxes. Oh sure they get the tax bill, but you're the one paying the higher prices for the product.
Trying to get company's to make a product in your country by raising Import Taxes like this, effects your own people with higher cost products, and things Exported from India to other country's, they can do the SAME THING, high Import of India products where people aren't going to pay the prices. You now have a trade war. It's beyond silly to think company's are just going to make their product in a 100 different country's all to save on a high Import Tax!!! It's a global economy. The iPhone may be built in Foxconn, but it gets parts from around the world including the U.S.
I would say F them. Keep Importing the phones and the people will pay the high taxes as a result. Apple can't go caving in to crap like this. Then it just spreads to other country's that will try and do the same thing. Let the people PAY those taxes. There's no money to be made in cheap phones. Let those company's play that game and go out of business. I think the U.S. Government should raise the Import taxes on some Indian products. Fair is Fair!!!!
Why don't learn some basic financials, before giving your "insight" in corporate taxing?
Import taxes are collected on all goods (no services) at the moment the goods are imported in a country, before the goods are paid by the end customer. Import taxes always lead to higher end user prices. Even if goods are sold with a loss, they have to be paid
Corporate taxes are on the profits a company makes in a country, and are calculated on the combined business of all sold goods, services, financials benefits, acquisitions, mergers, .... They are calculated after the closing down of the fiscal year, at least a few months after the sales are realized. In most countries profits in one fiscal year can be compensated by losses in other fiscal years. So calculating the corporate profit tax on a single product in advance subject to a lot of unknown factors (unless you are a monopolist selling a single product). Taking into account that Apple has a broad range of iPhone, iPads, Macs, Apple cannot have more than a rough estimate of the tax at the moment of the sale of an iPhone. Compensating the selling price in advance for corporate taxes is extremely difficult and very error prone. Corporate taxes do have a proven impact on the ability of corporations to invest in future products.
Conclusion : import taxes lead to higher prices, but correlation between corporate taxes and higher end-user prices is not so clear
Comments
Again, that's any company in any county because they all have rules that need to be followed and/or deals that need to be made to function in that country.
1) According to your own statements Apple has nothing to offer in a negotiation… or, do you want to admit that your comment was hyperbole.
2) A reasonable statement is just to say that the India is not the most ideal market for Apple's product and ethos at this time.
As long as Apple has phones at a lower level which they can actually sell, the X in India isn't really important.
I don't know why people can't figure this out. Ya, Tax the hell out of those EVIL Oil company's. Guess what, they pass those taxes right to you with higher gas prices. Corporations don't pay taxes. YOU pay the taxes. Oh sure they get the tax bill, but you're the one paying the higher prices for the product.
Trying to get company's to make a product in your country by raising Import Taxes like this, effects your own people with higher cost products, and things Exported from India to other country's, they can do the SAME THING, high Import of India products where people aren't going to pay the prices. You now have a trade war. It's beyond silly to think company's are just going to make their product in a 100 different country's all to save on a high Import Tax!!! It's a global economy. The iPhone may be built in Foxconn, but it gets parts from around the world including the U.S.
I would say F them. Keep Importing the phones and the people will pay the high taxes as a result. Apple can't go caving in to crap like this. Then it just spreads to other country's that will try and do the same thing. Let the people PAY those taxes. There's no money to be made in cheap phones. Let those company's play that game and go out of business. I think the U.S. Government should raise the Import taxes on some Indian products. Fair is Fair!!!!
Note: In your comments where you try to defend your stance that Apple has no play in the India market (i.e.: holds no cards) you inadvertently keep demonstrating the options Apple has (i.e.: plays they can make without being forced to fold their hand).
i should double check these numbers like I usually do but I’m too sleepy. They are in the right ballpark but don’t be surprised if they are off a little.
I think it's a great idea personally, I'd like the UK to do the same when we leave EU. It might be tough and expensive initially, but it'll foster local manufacturing and encourage the country to be self sufficient. If people really want something from another country, they will buy it regardless of cost - look at those that paid over 2k for an iPhone X on ebay etc.
Import taxes are collected on all goods (no services) at the moment the goods are imported in a country, before the goods are paid by the end customer. Import taxes always lead to higher end user prices. Even if goods are sold with a loss, they have to be paid
Corporate taxes are on the profits a company makes in a country, and are calculated on the combined business of all sold goods, services, financials benefits, acquisitions, mergers, .... They are calculated after the closing down of the fiscal year, at least a few months after the sales are realized. In most countries profits in one fiscal year can be compensated by losses in other fiscal years. So calculating the corporate profit tax on a single product in advance subject to a lot of unknown factors (unless you are a monopolist selling a single product). Taking into account that Apple has a broad range of iPhone, iPads, Macs, Apple cannot have more than a rough estimate of the tax at the moment of the sale of an iPhone. Compensating the selling price in advance for corporate taxes is extremely difficult and very error prone. Corporate taxes do have a proven impact on the ability of corporations to invest in future products.
Conclusion : import taxes lead to higher prices, but correlation between corporate taxes and higher end-user prices is not so clear