Why are iPhones more expensive
Apple products are expensive, no doubt. But they are more expensive in India as compared to the USA, Dubai and other countries. Well, let’s find out the reason for why iPhones
Fun Fact: Indians end up paying up to almost 40% extra for iPhones in India, then in the US. Pause this video and have a look at the table showing over here with the pricing of the Apple iPhone 12 Series and you’ll understand it!
Table of Contents
Philosophy behind Apple Products
Apple products have their own philosophy behind them. Each product is identical to other groups to make it seamless for switching. The company focuses on industrial design which everyone of us are aware of.
Every Apple user with their time on an Apple device gets locked and hooked onto the Apple Ecosystem. This is a type of loyalty which Apple products develop and we would discuss them as well.
Without wasting any more time, let us look at the key factors which makes them expensive:
Apple products by default are expensive because of their brand value and their ecosystem which users love. Apple is not just a functional company, it's a style statement. And for the non-tech savvy people out there, this ecosystem and simplicity make their lives a whole lot easier. And Apple surely does charge a high premium for this stuff which includes higher profit margins.
This is one of the main reasons for the increased price of Apple products in India.
Apple has no manufacturing units in India. Most of the production is contracted to Foxconn and other companies which are situated in China, Taiwan, and other Asian nations.
All the components are imported as well which drives the prices higher. According to the Indian Foreign Direct Investment Policy:
A company has to source 30% of components locally in order to set up a manufacturing unit in the country which is not possible for Apple.
Well, the iPhone XR was assembled in India in its Tamil Nadu facility. This made the price of that model comparatively affordable than other models.
Third Party Sellers and Distribution:
In India, the iPhones and other Apple products are sold via third-party contractors, sellers, and distributors. There are some official Apple Stores as well. But, they are rare, and even for those, the distribution is through third parties.
So, all this means that there are a lot of middlemen involved who take their own hefty cuts and commissions. This increases the prices.
Customs & Import Taxes:
There are a lot of taxes imposed for importing which is up to 18%. This is not just it. There are several other taxes such as printed circuit board assembly (PCBA) which is at 20% and chargers at 20%.
All of these taxes are carried in the retail price which drives the prices higher.
Thus, these are all the reasons behind the expensive prices of iPhones and other Apple Products. So, you may ask, will the prices of iPhones and other Apple products ever go down?
iPhone manufacturing in India
Well, it can only go down if the manufacturing is done in India. With the current scenarios of the Covid 19 pandemic, the factories in China were brought to a halt. So, maybe Apple or Foxconn might reportedly invest in India alternatively for expansion. But nothing is fixed or final as of now.
With this, Apple products might get cheaper.
Even after all this, the fans and enthusiasts for the ecosystem will keep using them. Apple products are going to be in demand no matter what.
Would Apple start manufacturing in India considering all of these government policies to comply? Do let me know your opinions about iPhones production in India!