Apple Inc. (NASDAQ:AAPL) is taking a bold move in India by appointing third-party distributors to sell iPhone throughout the country.
In India, Apple Inc. (NASDAQ:AAPL) doesn’t run branded stores because of the difficult local regulations. Until now, Apple Inc. (NASDAQ:AAPL) is selling the iPhone through Indian telecom providers (like Vodafone, Airtel, etc) but as the telecom companies don’t subsidize the cost of iPhones, sales have been limited in India. There are some independent phone retailers in the country who buy from these providers and then sell them. But overall it can be said that distribution of iPhone is very much limited to large towns only.
Apple Inc. (NASDAQ:AAPL) has appointed Ingram Micro and Redington as distributors in India, in addition to telecom operators. Redington has also confirmed that the iPhone has been added to its catalogue. The partnership between Apple Inc. (NASDAQ:AAPL) and these distributors will ensure that the iPhone reaches small cities and other hard to reach areas also.
ValueWalk's Raul Panganiban interviews Amit Anand, Co-Founder of INDF, and discusses his approach to investing and why India Financials are very attractive today. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with INDF's Amit Anand
Apple Inc. (NASDAQ:AAPL) has used distributors in the past for products like the iPad, but never appointed distributors for iPhone.
Earlier this year, Apple’s Chief Executive Tim Cook said that the company can see high potential in countries other than India, because of the high cost of distributing products here.
He said “We have a business there, that business is growing, but the sort of the multilayer distribution there really adds to the cost of getting products to market.”
The 8GB model of iPhone 4 is available in India for 26,500 rupees and the 16GB model of iPhone 4S has been priced at 38,500 rupees. The 3GS model of iPhone is being phased out and now the entry level smartphone is the iPhone 4. The price of iPhone has been dropped in the country, may be just to welcome the iPhone 5.
The company’s iPhone 5 is yet to arrive in India but some reports suggest that the phone can be launched in India before the end of this month, but this is very unlikely.
Pricing always plays a key role in India, as consumers here are very much price sensitive. It would be worth seeing how these new distributors price the new iPhone in India.