Apple has passed a trade subsidy amounting to a 13 to 15 percent margin for its flagship iPhone 5S to reach the target of 1 million mark by this year end.
This cost Rs 7500 of the price of an iPhone 5S, which is listed at Rs 53,500. Retailers may pass on some part of this to buyers to bolster demand as sales of high-end smartphones dropped for the first time ever in India this year. The margin offered by Apple is much higher than the norm, which is 6-10%.
According to market tracker CMR India, Apple has shipped 8.3 lakh iPhones to India in the three quarters, compared to 7.9 lakh total in the entire 2013. Apple had to cut down the price of iPhone 5C from Rs.31,900 to Rs 30,900.
Competition that Samsung offered in the luxury category devices made Apple to drastically reduced the price of iPhone 4 16GB from Rs. 31800 to Rs 26000. Even Samsung had to reduce the price of Galaxy S5, which was launched at a price of Rs Rs 51,500, but reduced later to Rs 39, 000.
Though Samsung lead the Indian smartphone industry with 39.5 percent of share, Apple held 55.3 percent of share in Rs 40000 plus category.
Apple’s move to expand rapidly by opening small stores across the country has failed, considering the revenue generated by each store. Distributors said that many of the resellers opened store without any market surveys.