India officially rejects Apple's bid to sell refurbished iPhones in the country

India officially rejects Apple's bid to sell refurbished iPhones in the country
Despite Apple CEO Tim Cook's recent schmoozing with India Prime Minister Narendra Modi, the Indian government today officially rejected Apple's application to sell refurbished iPhone units in the country. Apple had hoped to use the certified, previously owned handsets as a way to counter the high price of the iPhone in a country with a per capita income of $1500.

Demand for the Apple iPhone is high in India. During the company's fiscal second quarter, a period that saw Apple announce lower year-over-year iPhone sales for the first time in history, sales of the device in the country rose 56% year-over-year led by sales of the $300 Apple iPhone 5s.

In making the announcement, commerce and industry minister Nirmala Sitharaman curtly commented, "We are not in favor of any company selling used phones in the country, however certified they may be." This was the second rejection Apple suffered recently from the Indian government. Last week, Apple's request to be exempt from the current regulation that requires 30% of goods sold in retail stores to be locally sourced, was denied. The tech titan had hoped that opening Apple Stores in the market would raise brand awareness.


Apple might yet be able to get a waiver on this condition since the commerce ministry wanted to grant Apple the waiver, only to be overturned by the finance ministry. Both ministries will get together to see if they can reach a compromise. "We took a line that we would not mind waiving the 30% local sourcing norm for Apple," stated the commerce minister. "Now, the finance ministry has taken a different position. We will examine the matter in consultation with the finance ministry," Sitharaman said.

India is a major focus for Apple, but is a contradiction. In 2017, it will become the second largest smartphone market in the world after China. Yet 70% of new smartphone sales were priced under $150 last year. Most of the sales are made by local smartphone manufacturers who build low-priced Android models.

source: LiveMint

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55 Comments

1. Scott93274

Posts: 6030; Member since: Aug 06, 2013

If Apple is so concerned with ensuring that their sales don't continue in a downward trend all they have to do is permanently knock $200 off the price of their product as well as raise the storage capacity of their base iPhone from 16GB to 32GB. They would still be making more money per phone sold than most Android OEMs and they still sell more iPhones than any single Android model. Raising the storage capacity would stimulate more App store purchases, music, videos, apps...

4. Senthilg

Posts: 49; Member since: Apr 07, 2016

Maybe Apple don't want to reduce the price as in their quarterly earnings the average selling price of iphones are compared to the previous year's quarter always and not with other OEMs. So even if they sell more iphones by knocking off their price their ASP will come down drastically which might again be a problem.

6. Mxyzptlk unregistered

He doesn't understand business. You're going to have to simplify it a little more.

9. Scott93274

Posts: 6030; Member since: Aug 06, 2013

I'm going to start calling you John Snow, because you know nothing.

32. Mxyzptlk unregistered

I don't care what you call me lol. I assure you my feelings will not be hurt.

14. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

So in business, if your devices aren't selling, you just keep on doing the same thing and hope things change? Up until now, for companies other than Apple, that's what happens in business. Companies in all industries lower prices or offer more for the same price to get customers in the door. The difference is, Apple is now going to be in a similar position as other companies where they might just have to change how they do business to keep doing business.

33. Mxyzptlk unregistered

Change up is a good thing, I agree. But I don't think Apple should start offering cheap products. Remember, goodwill still exists. I can see them offering more affordable options and higher quality offerings.

52. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

What does that have to do with what you said before? You said he didn't know anything about business, when what he suggested is what most businesses do when sales start to slow. And offering cheap products have nothing to do with it. The products could still be offered with the same quality as they are now, but with less profit than they're getting currently. And considering they're making more per unit than most any other product, not just mobile devices, they could still do it and make a comfortable profit. Their problem is, they seem afraid to lose that profit per device to the point where they'll skimp on the features offered to hit a lower price point. At some point they're going to have to look at lowering their profit margin while still offering the same quality in their products. Thats what every company has to do at some point in their existence.

55. Mxyzptlk unregistered

I agree, but do you really think Apple offering a "cheap" iPhone is the option to go? A company isn't just about what products they offer, but also how they offer. Image is everything believe it or not. I'm not saying Apple shouldn't change things up some, but a drastic change is not the right way to go.

56. Scott93274

Posts: 6030; Member since: Aug 06, 2013

You agree with my logic? Thanks. Also, at no point did I ever say that Apple should offer a cheap iPhone. I suggested that they should offer a less expensive iPhone, there is a difference. I also said that they should up the base storage, which I know is something that you agree on. I also agree with you that Apple thinks that Image is everything, because I've been saying for years that the iPhone is a fashion statement or a status symbol, which is a very juvenile or egotistical reason to blow obscene amounts of money on a phone. Eventually people will grow up and expect more from their device and I suspect that time is very soon.

38. ibend

Posts: 6747; Member since: Sep 30, 2014

why not? blackberry, and microsoft does that to their phone... isnt it a good thing if apple just die? :D

15. marorun

Posts: 5029; Member since: Mar 30, 2015

Yeah lets simplify it even more. Apple is all about shareholder now ( thanks Tim Crook! ) So they wont do anything thats might affect negatively the stock even if its mean making more profit at the end. Thats what you can call a lack of vision but hey you have lost your visionary at the head of apple what can you expect?

26. darkkjedii

Posts: 30880; Member since: Feb 05, 2011

You said Tim Crook, now that's innovative.

29. sgodsell

Posts: 7005; Member since: Mar 16, 2013

So what's there to understand exactly Mxyzptlk. You seem to have the answer's, so please enlighten all of us here with your great wisdom. So how would you propose that Apple increase their declining global smartphone percentage of less than 15%? Maybe Apple should sell a $20,000 iPhone. You don't need to sell too many iPhones at that price to increase profits. It certainly would follow in the footsteps of their Apple Watches.

35. Mxyzptlk unregistered

There's a difference between cheap and affordable. Perhaps you should learn that one first.

43. sgodsell

Posts: 7005; Member since: Mar 16, 2013

So you like to dance around and praise Apple all the time, yet you have proved to me and the world, that you don't know your head from your @$$. I do know the difference between cheap and affordable. Clearly Apple cannot make affordable iPhones or cheap iPhones, and that is clearly the case in India, and the rest of the world. You still didn't answer my question, but I knew you weren't able to. As the saying goes. Apple has already shot themselves in their own foot. If Apple does lower the price of their iPhones in any significant way for one country, then they will have to lower the price in the other countries as well.

46. Scott93274

Posts: 6030; Member since: Aug 06, 2013

Yeah, Mxyzptlk is a tool that starts argument and doesn't know how to back up his statements.

8. Scott93274

Posts: 6030; Member since: Aug 06, 2013

Well, that's the thing, rules of supply and demand dictate that as demand goes down and supply goes up, the price must fall. That's Economics 101 right there. Apple could argue that, but then their sales would fall... oh, wait, look at that, it already is. I'm not arguing that they're not making obscene amounts of cash, but the simple truth of the matter is that for the first time ever, fewer people want an iPhone right now than they did a year ago, and that is far more damning to Apple than any report about bent iPhones, blurry superbowl photo, fappening controversy, exploding phones, defective antenna design simply because it points out that they're not immune to consumer trends, and that's what scares shareholders. When your company can't break that 15% global market share for several years running and suddenly sales start to drag you in the wrong direction It's time to panic, because like it or not, consumer electrons do in fact rise and fall on trends. If they are able to raise their user base by lowering the cost of the iPhone then they would increase their digital sales over time as well as their cloud services. Even with the smaller user base, Apple still makes more than Android in digital sales so it stands to reason that they would be far more profitable if they had more users. But fighting to sell refurbished iPhones on discount just highlights how unwilling they are to compromise to today's market.

16. marorun

Posts: 5029; Member since: Mar 30, 2015

Exactly. They dont want to compromise profit margin per phone sold. So they are okay to loose profit by not selling as much as they could. End result = less profit. but its not like Apple lack money..

24. dimas

Posts: 3320; Member since: Jul 22, 2014

Apple should do the right thing: dismantle those refurbished garbage, collect what can be recycled and dispose garbage properly. Instead of India, Tim should stop being too much of a businessman and spend more time on Japan and England, their waste management program is very good for the environment.

28. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

Or they could donate them to charities, like poor families or abused women shelters.

34. Mxyzptlk unregistered

Sorry techie, but I'm not going to read essays.

36. Scott93274

Posts: 6030; Member since: Aug 06, 2013

Says the guy who has no intelligent retort. I understand, reading is hard for you.

19. QWERTYphone

Posts: 654; Member since: Sep 22, 2014

Correction: Apple needs to sell a phone with top tier specs, with durable construction, a removable battery, and a microSD for $399. THEN, intelligent people would CONSIDER them. Now, only idiots and sheep buy Apple junk.

53. Scott93274

Posts: 6030; Member since: Aug 06, 2013

LOL, I reported this asshat for the racist comments he was making and he got limited as a result. Maybe next time we'll get lucky and he'll get banned. Then he can find some other online community to harass about the evils of companies not providing phones with removable batteries and expandable storage.

25. dimas

Posts: 3320; Member since: Jul 22, 2014

Apple should invest more on R&D: recycle and dispose department. Big companies earn billions but don't want to spend a single cent on disposing their e-garbage. Governments should be more strict on gadget productions, we're losing the planet's ability to cater human beings every year.

2. natypes

Posts: 1110; Member since: Feb 02, 2015

Very surprised at this. Apple has a lot of cash and money=power. Maybe the Indian PM wanted more than Tim wanted to give.

7. Ruturaj

Posts: 1484; Member since: Oct 16, 2014

I guess PM has different perspective, the import taxes are high so that local manufactures have better chance, I guess he sees things same way.

31. sgodsell

Posts: 7005; Member since: Mar 16, 2013

There is now 5 different OEMs in India all making smartphones. So Apple is not producing or making anything in India. Yet Tim wants to sell used or refurbished iPhones that won't sell anywhere else. Apple would be using India for a dumping ground.

40. ibend

Posts: 6747; Member since: Sep 30, 2014

but Apple dont waste their money or reduce their profit.. and indian PM is well aware that his nation already produce tons of smartphone, and of course he want to help the economy of his own people, and prevent them to not throwing their money for some overpriced imported junk

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