Ap­ple's pro­posal to sell re­fur­bished iPhones in In­dia re­jected

The Pak Banker - - COMPANIES/BOSS -

Close on the heels of the fi­nance min­istry in­sist­ing that the Cu­per­tino, Cal­i­for­ni­abased Ap­ple Inc. abide by the 30% lo­cal sourc­ing norm if it wants to open branded stores in In­dia, the gov­ern­ment has re­jected the com­pany's pro­posal to sell re­fur­bished iPhones in the coun­try.

"We are not in favour of any com­pany sell­ing used phones in the com­pany, how­ever cer­ti­fied they may be," com­merce and in­dus­try min­is­ter Nir­mala Sithara­man said at a press con­fer­ence.

Ap­ple chief ex­ec­u­tive of­fi­cer Tim Cook in an in­ter­view with NDTV 24X7 dur­ing his visit to In­dia ear­lier this month had ex­pressed his de­sire to im­port re­fur­bished iPhones to In­dia to make such phones avail­able at an af­ford­able price to In­dian con­sumers. "First of all, we would never 'dump' any­thing, this in vir­tu­ally all coun­tries in the world we have a process by which a phone that's been used by the first owner or is taken back and made to be new, if you will, and a war­ranty is placed on that, just like a war­ranty for a new phone. And it's sold for a more af­ford­able price and that hap­pens in sev­eral coun­tries. What we want to do is do the act of bring­ing it back to this pris­tine level, we want to do that in In­dia for the In­dian mar­ket. We may have to bring in some phones from other mar­kets in or­der to fuel the sup­ply chain if you will. But the act of bring­ing them to pris­tine con­di­tions, we want to do that in this coun­try," he said.

The fi­nance min­istry last week re­jected a rec­om­men­da­tion from the com­merce min­istry to waive the 30% lo­cal sourc­ing norm for Ap­ple to sell iPhones in its own branded stores and asked the in­dus­try de­part­ment to for­mu­late spe­cific guide­lines defin­ing state of the art and cut­ting edge tech­nol­ogy, both qual­i­fiers un­der which it had sought to waive the lo­cal sourc­ing con­di­tion.

Sithara­man con­firmed the same. "We took a line that we would not mind waiv­ing the 30% lo­cal sourc­ing norm for Ap­ple. Now, the fi­nance min­istry has taken a dif­fer­ent po­si­tion. We will ex­am­ine the mat­ter in con­sul­ta­tion with the fi­nance min­istry," she said. In­dus­try de­part­ment sec­re­tary Ramesh Ab­hishek said Xiaomi which had ear­lier sought waiv­ing the 30% lo­cal sourc­ing norm has now writ­ten to the de­part­ment, say­ing it does not need the waiver as it has started man­u­fac­tur­ing in In­dia. How­ever, the pro­posal is to be sent to the fi­nance min­istry, he added. An­other Chi­nese mo­bile com­pany LeEco has also sought a waiver of the 30% sourc­ing norm.

Ap­ple cur­rently has Ap­ple-owned re­tail stores across the world, in­clud­ing the US, the UK, Ger­many, France, China and Ja­pan. The com­pany sells its prod­ucts in In­dia through ex­clu­sive re­selling ar­range­ments with chains such as Imag­ine and iS­tore (owned by Re­liance Dig­i­tal). Sales in In­dia is the only bright spot for Ap­ple, grow­ing at 56% in the lat­est quar­ter, as the com­pany re­ported its first quar­terly rev­enue drop in 13 years last month. Ap­ple's in­ter­est in sell­ing re­fur­bished phones and open­ing branded stores in In­dia shows the in­creased im­por­tance of In­dia for the com­pany. Its sales in In­dia crossed the $1 bil­lion mark for the first time last year, ac­cord­ing to fil­ings with the reg­is­trar of com­pa­nies. In 2012, Ap­ple In­dia changed its sales model by ap­point­ing re­tail dis­trib­u­tors and be­gan ad­ver­tis­ing cam­paigns. Since then, its sales have been rising at dou­bledigit pace and the top man­age­ment of Ap­ple has ac­knowl­edged the im­por­tance of In­dian op­er­a­tions on an­a­lyst calls sev­eral times.

Ap­ple has a mi­nus­cule mar­ket share of un­der 2% in In­dia's smart­phone mar­ket as com­pared with rival Sam­sung Elec­tron­ics Co. Ltd, the leader in In­dia's smart­phone mar­ket.

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