Apple Tim Cook with Indian PM Modi During Visit to US

Apple’s Success in India Relies Upon the Refurbished iPhone

Tim Cook’s tour of Asia continues in India this week as Apple is looking into expanding it’s new markets in the West.

The tech giant has already pumped a $1b investment into Didi Chuxing – Uber’s huge Chinese competitor with an 87% share of the market.

But Apple product sales growth is now starting to slow down in China due to increased innovation by Chinese rivals in their home market.

year-on-year-revenue-growth-apple-sales Apple’s Year on Year Revenue Growth by RegionCredit: MarketWatch

In 2016, Apple is looking to focus more attention on pushing their products in India, specifically the iPhone, which currently has only a 2% share of the Indian smartphone market.

Apple CEO, Tim Cook, with Indian Prime Minister in San JoseApple CEO, Tim Cook, with Indian Prime Minister, Narendra Modi, in San Jose, CACredit: IANS

The potential in India is huge and the momentum is there. It was the only market that had growth in iPhone sales in the first quarter of 2016, at 56%.

So what is the real opportunity in India right now?

It is the refurbished iPhone.

Currently, the iPhone SE retails for RS 39,000 (USD $580), much more than in the US (USD $447). This is in order to keep healthy margins. But this prices out 98% of the Indian market.

Refurbished iPhones would allow Apple to cut prices drastically to become much more competitive in India. They could potentially enter the sub-RS 20,000 (USD $298) market with the refurbished iPhone 4S and other previous generation refurbished iPhones, and therefore start to eat into Android’s huge market share.

So why doesn’t Apple make a big push into India with refurbished iPhones?

Because it can’t.

The Indian government have rejected its requests to import and sell refurbished iPhones to the country – both in 2015 and 2016. Tim Cook will be trying to persuade the Prime Minister, Narendra Modi, to revert these decisions, but it is likely that the PM will continue to promote the Make In India initiative that requires a large proportion of the manufacturing to be carried out in India, and not elsewhere and imported.

Whilst Indian customers may have to wait a while before they can get their hands on less expensive iPhones, Apple is still making a big push into the country, with the announcement of an iOS App Design and Development center in Bangalore, set to open in 2017, to foster the Indian talent and help bring their creations to a worldwide market.

With this new investment into India, it looks like Apple is really pushing to build strong relations with the state and we hope that they are granted permission to sell refurbished products sooner rather than later.

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