Everyone who owns an iPhone or wants one, knows that they are expensive phones. Smartphones in general are getting expensive as the days go by. We’re seeing a surge in smartphone prices as Apple became the first company to price a smartphone at $999. That marked the beginning of price wars. What used to happen at the lower end of the spectrum with companies bringing down prices of phones, now happened at the upper end.
Manufacturers like Apple and Samsung started pricing phones upwards of $999 and those prices were hiked further as iPhones were imported to India and Apple had to pay 20% import duty on each handset.
But that started to change as Apple announced it would start manufacturing some of its iPhone models like the iPhone 8 and iPhone X in India. And it has plans to make more models in the country.
As another breath of fresh air for the tech giant, it has finally got the approval to open an Apple Store in India after years and years of struggle. Apple’s patience will finally bear fruit for the Tim Cook-led company as they look to open the sub-continent’s biggest Apple store in Mumbai.
Well, now that Apple will actually manufacture iPhones in India and not just assemble them, it can actually avoid paying the 20% import duty. This will have multiple benefits for the company as not only can they cut down the prices of their future products, but they can also have a go at increasing its market share in India, which currently sits at a measly 1% in the Indian market.
In an earnings call, CEO Tim Cook said, “We would like to place retail stores there (in India). And we’re working with the government to seek approval to do that. And so, we plan on going in there with sort of all of our might.”
According to a recent report by Bloomberg, Apple plans to open a store in Mumbai in one of the city’s iconic locations (undecided as of now). This is in-line with the company’s strategy of opening retail stores in prime real estates, such as the Fifth Avenue in New York, Regent Street in London or the Champs-Elysees in Paris.
India has always been a big market for smartphone companies. However, it has largely been dominated by budget players who compete in the hyper-competitive mid-tier smartphone market, with prices ranging from Rs 10,000-Rs 30,000. Apple competes in an entirely different league as even its budget offering iPhone XR currently retails for Rs 59,990, double the price of Xiaomi, Vivo or Oppo phones which dominate the Indian smartphone market.
According to recent data, Xiaomi sits at the top with a market share of about 27% while Samsung controls about 20%. Compare that to the iPhone’s 1% market share and you can see why Apple wants a bigger slice of the pie.