Bloomberg:
India has rejected Apple Inc.’s request to import and sell refurbished iPhones to the world’s second largest mobile population, a telecommunications ministry official said Tuesday.
The U.S. company’s application has been turned down, the official said, asking to not be identified, citing official policy. Apple has been seeking permission to import and sell used phones to court price-conscious consumers with a similar proposal rejected in 2015 by the environment ministry.
This might be a serious blow to Apple’s plans in India. The Indian consumer is much more price conscious and less concerned with brand image than China and Apple was counting on refurbs to help them get a foot in the door.
So much for a more affordable alternative for the non-affluent over there.
Apple needs to adapt both its business strategy and its products for the Indian market just like it did for China. While price sensitivity is an issue, a bigger issue is the fact that local telecom rules and carrier policies ensure that most Indians have two or even three sim cards and as such prefer to buy dual sim phones to single sim phones. Another issue is the approximately 35% import duty and additional franchisee cost of approximately 10% which jacks up the price for many from just reachable to not affordable.
Two possible solutions to Apple’s woes in India
1) Invest in India by opening retail stores and e-waste recycling centres, thus generating jobs and in exchange get a deal that cuts down the import duty. Consider making Apple merchandise in India and exporting it to other countries, further sweetening the deal for the Indian Government.
Make a 32 GB, dual sim smartphone that retails for around INR 22,000 (~$400). Strongly consider offering a 3 or 4 year protection plan for the device, deliver first world quality in service and bump up the asking price to around INR 28000 (~430)
2) Invest in a fledging Indian mobile company and fork Android or LunaOS by adding a bunch of Apple services like Facetime, iMessage, etc to it. A firm like this gives Apple a sub-brand to push its services while developing smartphones tailored to other developing countries in addition to India. Boosting local talent can also help Apple with recruitment as well as on the H1B visa issue.
Unless it adapts, Apple will continue to face growth problems and the strong run of the USD will only make matters worse.