It’s been just three days since Apple’s latest phone, the iPhone 15 series, began selling in India. The craze among iPhone lovers surely knows no bounds, with people lining up for hours outside Apple’s Delhi and Mumbai stores to grab the iPhone 15.
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What Is iPhone 15’s Price In India?
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The iPhone 15, which costs $799 in the U.S., is selling for Rs 79,900 ($965) in India. The $999 iPhone 15 Pro is selling at Rs 1,34,900 ($1,628), whereas the $1,199 iPhone 15 Pro Max is made available at a record Rs 1,59,900 ($1,930).
Why Are iPhones Still Expensive In India?
Despite the increasing local production, iPhone prices in India remain significantly higher compared to other countries like the US, Dubai, and Singapore. The reasons behind this price disparity are multifaceted.
Firstly, iPhones are not entirely “made in India” but rather assembled in the country. The supply chain for iPhone production still relies on components imported from other regions. Consequently, Apple is subject to customs duties, which have a direct impact on the final prices. Additionally, the Goods and Services Tax (GST) of 18% further contributes to the cost, resulting in a cumulative increase of 40% in the final price.
Moreover, pricing involves a complex interplay of factors beyond material costs. Apple has partnered with local companies to provide discounts and trade-in options, mitigating the impact of heavy customs duties and taxes on imported models.
It’s essential to note that older-generation iPhone models significantly drive Apple’s sales in India. Analysts suggest that the profit margins earned from the sale of Pro models help make base models and older-generation iPhones more affordable. This strategy has led to substantial price reductions, making iPhones more competitively priced in India compared to countries like Dubai and Singapore.
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Also Read: How A Lost iPhone Led To Warren Buffett Investing Billions In Apple
While the number of iPhones assembled in India has risen significantly over the years, not all models are produced domestically. This reality prevents Apple from implementing dual pricing tiers, one for locally assembled iPhones and another for those imported.
Lastly, it’s worth mentioning that the price stability of flagship smartphones is not unique to Apple. Other smartphone brands, such as Samsung, Oppo, Xiaomi, and Vivo, also manufacture phones in India, including flagship models. Despite this, the prices of flagship devices have largely remained unchanged over the years.
According to TechCrunch, “Per usual, Apple did move international prices of iPhones, largely to reflect currency movements. However, in contrast to last year, where a strong dollar drove Apple to raise prices in most foreign currencies in order to keep prices constant in dollar terms, smaller moves in the dollar meant that price adjustments were more mixed, with Apple raising prices in Japan and for the Pro models in India and lowering them in Europe – all in line with currency moves,” analysts at AllianceBernstein said.
So, one of the reasons for the iPhone 15’s higher price in India is that the Indian rupee has been depreciating in value against the dollar since the past year.
“The one notable exception is that despite a weaker yuan, pointing to Apple potentially raising prices in China, Apple instead held prices constant, potentially reflecting concerns about a weaker consumer and rising political backlash.”
Moreover, Apple has limited collaborations with local banks in India for convenient financing options, and trading in a year-old iPhone at its store in the country typically yields only about one-third of its original value ($603 on the $1,767 iPhone 14 Pro, anecdotally speaking).
For careful Apple observers, that’s not surprising at all — they claim that Apple has treated India as a second-class citizen for over a decade. Even after paying a hefty price, Apple customers in India will not get access to scores of services, including News+, Fitness+, and Apple Pay.
As per ET, several factors contribute to these price disparities. A key Apple distributor explained, “One of the reasons is the supply chain, as several components are shipped after the payment of import duty. Also, the scale of business in India is much less when compared to strong volumes in the US and Dubai.”
What Are Apple’s Plans For India?
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As recently as today, it’s been reported that Apple plans to increase production in India more than fivefold within the next five years, as per PTI report, citing government officials it didn’t identify.
The company surpassed $7 billion in production in the country in the last financial year and is aiming for $40 billion.
Apple’s presence in India has been on the rise since 2016 when the company began local production of some iPhone models. According to reports from the India Cellular and Electronics Association (ICEA) and government officials, smartphone exports from India exceeded $11 billion in the fiscal year ending in March, surpassing the $9-10 billion target. Notably, Apple accounted for nearly half of these exports.
As per the ET report, Apple is gearing up to locally manufacture the iPhone 15 Plus in the upcoming quarter, following the successful commencement of iPhone 15 production in India. This shift underscores the steady growth of iPhone manufacturing in India over the past four years, with expectations of reaching approximately 6% in 2023.
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