Apple's request for importing and selling refurbished iPhones in India has been rejected.
Apple has received a nod from the Indian government for opening its company stores in the country. However, the Mobile and Communications Council, a newly-formed industry body in India that includes some popular smartphone makers such as Samsung, Intex and Micromaxx have rejected Apple's application for selling "certified pre-owned" iPhones in the country.
Counterpoint Research highlights that the smartphone market in India has grown by 23 percent in 2015 despite a global slowdown. About 40 percent of all mobile phones sold in India were smartphones. India has also surpassed the U.S. and become the second-biggest mobile phone market in the world after China.
Apple iPhones are quite popular in India, but the company has just two percent of the smartphone market share in India. Stiff competition from rivals that are offering handsets at cheaper price points poses a big challenge for Apple.
A previous report also suggests that the iPhone maker has struggled with the prices of iPhones in India. The report highlights that the 16 GB model of the iPhone 6s had a price tag of Rs. 40,500 (about $609) in India. The company has now revised the price to Rs. 48,000 ($722).
The 16 GB iPhone SE is priced at Rs. 39,000 (around $586) in India.
Smartphone consumers in India are price-conscious, and the premium price tag of the iPhone is a deterring factor for customers to buy one.
Apple might have thought that introducing refurbished iPhones in India would help in increasing the customer base and the company's market share in the country. However, the company's rivals suggest that Apple's move will impact the Indian government's "Make in India" initiative, which encourages local assembling of products, including smartphones. Some rivals claim that India may become a dumping ground if Apple is allowed to import and sell refurbished iPhones in India.
Apple suggests that pre-owned iPhones come back to the company and working parts are reused, while other components are replaced. The phone gets a new IMEI number and goes through the same quality checks as a new handset.
A certified refurbished iPhone is estimated to have a similar lifespan as a new iPhone but costs less. Bringing down the price makes an iPhone affordable for more Indian customers.
Tim Cook, Apple's CEO, met Indian Prime Minister Narendra Modi in 2015 and discussed plans for manufacturing iPhones in India. Cook will have to assert that refurbishing of iPhones will be done in India, which may temp the Indian government to change its decision and allow sales of refurbished iPhones in the country.
Photo: Mike Deerkoski | Flickr
