INDIA: Distributors are aiming at unifying the prices of iPhones both in online and offline marketplaces in India.
The move has been caused by the flagging offline sales of iPhones and has come at a time when there are proposals to open Apple’s own stores in India. Senior Apple India partners say that the stores are expected to become the primary revenue driver.
“The poor sales of iPhone SE in India have further accelerated the move of Apple to push for uniform pricing structure. Even offline sales of iPhones had taken a hit due to the huge online discounting, which Apple headquarters has not taken in good spirit and hence the company now wants to correct and bring about a common pricing,” the chief executive of a leading cell phone retail chain said.
Samsung is a rival of Apple and was the first to initiate uniform prices in its products, both offline and online. The executives say that the move assisted Samsung to have overall share in an Indian market that is highly competitive when it comes to smartphones.
The four distributors for Apple in India are Redington, Rashi Peripherals, Ingram Micro and Beetel-Brightstar. It is said that the leading retailers have already been informed regarding the intentions by senior Apple India executives.
Apple responded to ET’s questions by saying that the company doesn’t control prices and that the maximum retail price has experienced no change. “It is wholly incorrect for your line of questioning to assert that Apple has communicated any pricing change,” the company said.
Most online resellers got price advantage as a result of getting iPhone stocks from markets like Bengaluru and Hyderbad, where the VAT on mobile phones was less by 5% and sold them to places such as Mumbai and New Delhi where the value added tax is up at 12.5 – 14.5 per cent.
The executives said that the e-sellers were advantaged and were able to provide discounts and this made there be a huge price difference.
Another senior industry executive said that Apple distributors were reducing the prices in an aim to meet the targets. “This too should now stop since Apple wants to bring back channel hygiene, since the way the distributors were fluctuating prices the offline retailers were sceptical about picking up huge stock,” he said.
Apple is ready to establish its own Indian stores and wants to be exempted from local sourcing norms.