Apple Chasing Market Share in India by Letting Retailers Reduce Prices on Older Model iPhones

As Apple gears up to sell iPhones directly through its website in India later in 2017, the company's successful sale of older generation iPhones in the country has come to light in a new article by Bloomberg. Within India, Apple has let third-party resellers and shops -- including Amazon and Flipkart -- reduce prices for "retro model" iPhones, because Indian users are said to be willing to concede in performance and specs for a cheaper Apple-branded smartphone.

One of the older iPhones in question is the iPhone 5s, launched in 2013 and replaced by the iPhone SE three years later in 2016. One user in the country described purchasing an iPhone 5s for 20,400 rupees (about $300) at local reseller iPlanet, and Amazon even listed the 5s as low as 15,999 rupees during a sale in May. Right now in the U.S., the cheapest iPhone you can buy is a SIM-free iPhone SE for $399.


Last summer, Apple CEO Tim Cook admitted that iPhones are too expensive in India, saying he wants Indian customers "to be able to buy at a price that looks like the U.S. price." Now, it appears that potential iPhone users in India are being able to do that at even cheaper prices.

Now it’s letting stores and online retailers such as Amazon.com Inc. and Flipkart Ltd. slash prices for retro models, a rare concession for a brand that carefully guards its high-end image

“It doesn’t bother me that it is several generations old,” says Varuni T.V., a business professor in India who teaches at a college in Hospet, a mining town six hours north of Bangalore. “It’s a good feeling to own an Apple phone.”

Apple shipped 2.6 million devices to India in 2016, and older iPhones accounted for about 55 percent of those devices. In addition to the iPhone 5s, the iPhone 5 and iPhone 6 are said to be popular options at Indian retailers and online stores. The company is believed to be doubling down on this retro iPhone sales idea, hearing retailer pitches about cash-back offers, product exchanges, and monthly payment plans on iPhones, "all aimed at making it easier for young Indians to spend a month’s earnings or more on a 5S."

Additionally, Apple will hire "affordability managers" in India, who will negotiate with banks and other money lenders on behalf of potential iPhone buyers, focusing on customers in smaller towns with less of a track record in buying expensive smartphones. Apple's competition in the country is still steep, with Xiaomi and Oppo remaining the dominant forces in the Indian smartphone market.

Analysts remain hopeful for Apple's presence in India, thanks to the onset of iPhone SE production in the country in its Bangalore plant. Next, it's believed that Apple will attempt to begin individual component manufacturing for iPhone devices in India in order to continue establishing its foothold in the country.