More positive feedback on Apple’s efforts to reshape practices in the face of emerging markets. Sales of the iPhone 4 in India tripled in only five days, following a trade-in program. The program is viewed by some as a “disguised discount” but the results are obvious for Apple and its plans to compete in a nation where smartphone sales are just taking off.
Although India does not have a subsidy program to soften the blow of a full-priced iPhone, Apple has found a way to reduce the sticker shock by sharing the handset’s cost with a growing network of India’s retailers…
The plan essentially discounts the $486 iPhone 4 by 50 percent. Consumers in India interested in buying the handset receive at least $128 for a used handset – no matter the brand, condition or age, according to The Times of India.
“Apple follows a single pricing policy across the world and the company or its distributors have resorted to indirect discounting to improve penetration of iPhones in India.
Smartphone volumes in India either come from the entry-level or the Rs 12,000-22,000 ($220-$400) segment, which is where Apple wants to position the iPhone 4,” said the official working with a premium reseller.
Retailers in the country pay around $36 to resell the phone. Apple then pays another $91.63, reducing the end cost to just over $256.
Apple’s handset used to priced out of reach of most customers in India
One reseller in India described the move as an “indirect discount” allowing Apple to maintain a single global price for its products while adapting to market-specific needs. The discount arrangement may also put a different spin on Apple’s much-discussed inexpensive iPhone: it could be pricing, not product.
The flexible pricing has boosted Apple into the top three smartphone sellers in India, the change sparking a price war with South Korea’s Samsung. The company now offers a markdown on its high-end Galaxy S3 smartphone, Note and Tab for credit card customers, according to the report.
The surge in iPhone 4 sales may be the fruit of last month’s push by Apple to increase the number of franchisees in India. The Cupertino, California company has also poured money into local advertising and promotion to advance brand awareness.