- Yesterday it was reported that Apple will be assembling its top-end iPhones in India through its local Foxconn unit starting next year.
- The whopping 20% import duty by the Indian government is one of the main reasons behind the ever increasing prices of the iPhone.
- Avoiding the import duty is expected to be only a ₹5,000-₹10,000 drop in price.
- But Apple can capitalise on the opportunity by focusing on users looking to shift to iOS from Android in lieu of privacy and security concerns.
While Apple has been recovering from its market share dropping to an all-time low of just 1% in Q2 2018, its local domestic assembling is yet to pick up. The main obstacle remains that the American smartphone giant is relying primarily on imports for its sales.
The ‘Made-in-India’ Apple iPhone might become cheaper but only by a mere ₹5,000-₹10,000. That’s hardly a dent in the price of the iPhone XS Max, currently the most expensive iPhone variant, that costs ₹144,900.
The opportunity for them — as has always been — is the offer of better privacy and security. In fact, a survey conducted by the Consumer Intelligence Research Partners (CIRP) shows that more users in India are switching over from Android to iOS for precisely that reason.
The bane of imports
Over the past two years, the smartphone market in India has gotten increasingly competitive. So much so, that Android brands like ASUS and OnePlus are launching premium features at a relatively budget price.
Even brands like Xiaomi and Samsung, who have consistently led in the Indian smartphone shipments market share, are integrating higher specifications into their entry-level and budget smartphones.
Apple’s marketing strategy, on the other hand, has not been as clear. Pricing has been a barrier that hasn’t allowed Apple to compete for market share in India. Among the latest iPhones that were launched in September, the cheapest iPhone — the iPhone XR — costs ₹76,900.
Older iPhones, while cheaper, aren’t as tempting to buy because the most recent models by other smartphone brands with the latest specifications come at the same price, if not less. Even when taking the 20% import duty out of the equation, the iPhone won’t be cheap enough to compete with the likes of OnePlus, ASUS or Huawei.
Ray of hope
While the iPhone has always projected itself as a ‘luxury’ product, its user interface has also been one of the most secure. A far higher percentage of mobile malware is targeted at Android than at iOS.
The App Store — the iOS equivalent of Google’s Play Store — is much more stringent about which apps are available its users. So much so that the company initially refused to make the Telecom Regulatory Authority of India’s (TRAI) DND app available on its platform because it didn’t meet its security requirements.
There’s an opportunity here for Apple. Apple has never claimed to compete on price, but it still needs to augment its approach to become more endearing to the Indian consumer.
See also:
Apple's top manufacturer Foxconn will start making higher-end iPhones in India, moving production out of China amidst trade war
Apple says it provided data on 18 user accounts to the Indian government in connection to an iTunes Gift Card fraud investigation
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