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India Turns Down Apple's Request to Sell Used iPhones

June 12, 2016

 

In March, Apple submitted a formal request to the Indian government in relation to selling refurbished iPhones in the country. Today, however, Commerce and Industry Minister Nirmala Sitharaman said that she is "not in favor" of accepting that proposal.

 

On Apple's proposal to import refurbished phones and sell in India, Sitharaman said, "We would not be in favor of whatever you may call them -- used but refashioned, remodeled, updated... used goods. We are not in favor of bringing them here."

 

The decision comes just days after the Indian government decided not to exempt Apple from a local rule requiring that 30 percent of goods sold by foreign companies be manufactured or produced within the country. India last year exempted retailers selling state-of-the-art goods from the rule, prompting Apple to file a new application in hopes of opening single-branded retail stores in India. 

Apple is opportunistic about increasing its presence in India, where its market share is estimated to be only around 2 percent. Apple CEO Tim Cook, who visited India earlier this month, said the country provides a "really great opportunity" for growth, particularly after sales in the U.S. and China have slowed. Apple's revenue grew 56 percent in India last quarter, passing the $1 billion mark for the first time. 

India has price-sensitive consumers, however, so Apple's inability to sell refurbished iPhones in the world's second most populous country may hinder it efforts to grow in the region. Cook has admitted that iPhones are too overpriced in India, compared to equivalent U.S. pricing, due to local tariffs. 

"The duties and the taxes and the compounding of those takes the price and it makes it very high. Our profitability is less in India, it's materially less — but still I recognize that prices are high," said Cook, in an interview with Indian network NDTV. "We want to do things that lower that over time, to the degree that we can … I want the consumer in India to be able to buy at a price that looks like the U.S. price." 

Typically, in the U.S. when a customer brings their phone into Apple for repair, whether it be for a cracked screen or missing home button, Apple tends to force the customer to purchase a refurbished phone. This is regardless of the fact that they claim to offer sole services for fixing parts. At least for now, Apple's plans will seemingly not involve the sale of these refurbished iPhones in India.

 

Credit: MacRumors

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